Germany lifts growth view

The Council of Economic Experts raised its forecasts for German economic growth to 1.3% in 2026 and 1% in 2027, up from its previous estimates of 0.5% and 0.8%, respectively. It attributed the improvement to a faster-than-expected recovery from the energy-price shock, stronger exports and increased government spending. However, it warned that higher energy prices would push inflation to 2.8% in 2026 and 3.3% in 2027. The council also cautioned that the federal budget gap could widen to between 2.7% and 4.8% of GDP by 2040—equivalent to around €120 billion to €215 billion, based on last year’s GDP.

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