The outlook for Germany’s economy looks set to deteriorate further, according to the latest growth forecast released by the federal government. The report, which will be presented by Economy Minister Katharina Reiche (CDU) on Wednesday as part of the annual economic review, projects gross domestic product (GDP) growth of only 1 % in 2026. In the fall, the forecast had been 1.3 %. The government now expects GDP to grow 1.3 % in 2027, with potential growth figures in the following years slipping as well.
The new forecast assumes only modest growth in German exports to other countries. Export growth is now projected at 0.8 % in 2026, down from 1.2 % previously, while it remains at 1.6 % in 2027. The Ministry of Economy has attributed these weaker export prospects to “dual headwinds” stemming from problems with both the United States and China, a point highlighted in a presentation on the new forecast that was reported by the “Handelsblatt”.
Domestic consumption is expected to increase by 0.8 % in 2026 and 1.1 % in 2027, but the overall recovery of the domestic economy will come primarily from public spending. Public consumption is projected to rise by 2.4 % this year, according to the government’s estimate. Regarding labour market conditions, the forecast calls for an unemployment rate of 6.2 % in 2026 and 6.0 % in 2027.