Several leading German economic research institutes said they have more than
doubled their joint growth forecast after the economy outperformed in 1H.
now expect GDP to rise 1.3% in 2026, up from a spring forecast of 0.6%. They
lifted the next-year forecast from 0.9% to 1.1% and saw growth slowing to 0.4%
in 2028. Outperformance in 1H was driven by exports, manufacturing and
substantial public spending; strong global demand and an AI-driven boost offset
weak investment and consumption. The institutes expect the recovery to continue
into 2027 supported by consumption and housing, but to lose momentum in 2028 as
a shrinking labor force and weaker potential growth increasingly constrain
output.
