🔶 Germany’s economy surprises; growth forecast tripled

🔶 Germany’s economy surprises; growth forecast tripled

Germany’s unexpectedly strong performance in the first half of the year, along with a special infrastructure financing fund funded through borrowing, have helped boost the country’s economic outlook. Economists have tripled their forecast for Germany’s economic growth.

The Cologne-based Institute of the German Economy (IW) has tripled its forecast for this country’s economic growth for the current calendar year (2026).

Based on the institute’s forecast, instead of growth of 0.4%, growth of 1.2% is now expected. The main reason for this revision is described as the unexpected and favorable performance of the economy in the first half of the year.

In addition, for the first time, the special fund for infrastructure modernization funded through borrowing will be available throughout the entire year.

At the same time, the report states: “In the second half of 2026, the growth rate will slow down again.” According to this report, the temporary strengthening effects on exports are fading, and private consumption is being harmed by high energy prices. The construction sector crisis will also continue, and major public investment will be its most important driver.