Germany's Economic Forecast: Expected to Emerge from Crisis by 2026
According to multiple economic research institutes, Germany's economy is expected to overcome its longest economic crisis since 1949 by 2026. The Munich-based Ifo Institute revised its GDP growth forecast for next year from 0.8% to 1.5%, while the Kiel Institute for the World Economy predicts a growth rate of 1.6%. Other research institutions, such as the Leibniz Institute for Economic Research, estimate a growth between 1.1% and 1.5%.
Despite the optimistic forecast for 2026, the Ifo Institute remains cautious regarding the longer-term outlook, predicting an average annual growth rate of only 0.3% to 0.4%. The increase in consumer spending in Germany and the economic plan announced by the new government are seen as factors contributing to this growth.
However, the German government's economic ministry emphasizes a cautious stance on economic prospects, stressing that U.S. trade policies and tariff increases may pose risks to exports.
