Economic forecast
DIW expects 1.7 percent growth for 2026
After years of the doldred, the German Institute for Economic Research for the coming year expects a strong upswing – and thus joins the forecasts of other institutes.
As a result of the federal government’s planned investment package, the German Institute for Economic Research (DIW) expects a significant economic upswing from next year. “All in all, the price -adjusted gross domestic product in Germany is likely to grow by 0.3 percent this year and noticeably 1.7 percent in the coming year,” said the institute in Berlin. The economic researchers thus revised their previous forecasts by 0.2 percentage points for the ongoing and 0.6 points for the coming year.
Already the day before, four business institutes had adjusted their forecasts for the coming year. After three years of stagnation for the coming year, the Munich IFO Institute expects an increase in gross domestic product by 1.5 percent. That would be almost twice as much as the originally assumed 0.8 percent.
The Institute for the World Economy Kiel (IFW) predicted a growth rate of 1.6 percent for 2026. The Essen Leibniz Institute for Economic Research (RWI) is now expecting a strong plus of 1.5 percent. The Leibniz Institute for Economic Research in Halle (IWH) is somewhat less optimistic with an expected increase of 1.1 percent.
DIW hopes for strong impulses from investment package
Strong exports and increasing consumption among consumers had already caused more dynamism in economic growth in the first quarter of this year, the DIW said. The reason for the higher exports are, however, an advanced effects due to the customs threats by US President Donald Trump. “In the second half of the year, the German economy will probably cool down a bit at first,” the institute predicts. “The uncertainties from US trade policy, still existing structural problems of the German economy and fear of loss of job are likely to be struggling again.”
However, the extensive financial policy measures decided may then have an effect and significantly advance the economy at the turn of the year. Especially from the planned special funds for the infrastructure and the military, the economic researchers promise positive effects on investments and consumption.
DIW President Marcel Fratzscher, however, insists on more speed in implementation. “The new federal government has sent many correct signals, but must now urgently say goodbye to the households for 2025 and 2026 and not only present a clear vision of the future, but also solve internal conflicts – especially for taxes and social spending -” he emphasized.
dpa
Source: Stern
