German economy may grow more strongly than expected
Research institutes raise their forecast for 2026, but warn that the recovery rests on a narrow base.
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German economic research institutes expect growth of 1.3 per cent in 2026. In the spring, they were still forecasting 0.6 per cent, but high energy prices and structural problems make the recovery vulnerable.
The joint autumn forecast by German economic research institutes projects gross domestic product growth of 1.3 per cent in 2026. That is more than twice the 0.6 per cent forecast by the institutes in the spring. The forecast is an estimate, not a definitive measurement of economic growth.
According to the institutes, the improvement is mainly due to stronger exports and higher value added in manufacturing. The international economic climate and global demand for artificial intelligence are also said to have provided support. For Dutch companies, Germany is important as a trading partner and as a market for industry, logistics and business services.
At the same time, the researchers are tempering their optimism. They say the German economy is recovering from a narrow base. High energy prices, structural problems in industry and temporary restrictions caused by low water levels continue to weigh on growth. For energy-intensive companies in particular, a higher growth forecast does not automatically mean that costs and scope for investment will improve.
For 2027, the institutes expect growth of 1.1 per cent. In 2028, growth is expected to fall back to 0.4 per cent. The figures therefore point to a recovery that may gradually lose momentum if German industry does not improve its competitive position and domestic demand remains weak.
The forecast also has a political component. The researchers warn that greater political populism could reduce Germany’s attractiveness to skilled workers and exacerbate the existing labour shortage. That warning is an interpretation by the institutes; it is not a separate measurement of an effect on the labour market. The figures themselves remain dependent on assumptions about energy, trade and policy.
One story, several perspectives
What is established
- German research institutes have raised their growth forecast for 2026 from 0.6 to 1.3 per cent.
- The estimate is based on assumptions about exports, industry, energy and the global economic climate, among other factors.
- The same institutes warn of high energy prices and structural problems.
Left
Arguments The left will stress that growth is socially valuable only if it leads to better wages, public investment and sustainability. From this perspective, a recovery driven mainly by exports and technology may remain vulnerable and unevenly distributed.
Values Social security, public investment, worker protection and the climate transition.
Consequences More public investment could support the economy, but may increase national debt and pressure on public finances.
Centre
Arguments The centre will welcome the higher forecast, while also pointing to the uncertainty of projections. The institutional approach focuses on a combination of fiscal discipline, energy conservation, education and targeted support for productivity.
Values Stability, predictability, competitiveness and workable policy.
Consequences A gradual reform agenda could strengthen the foundations of the recovery, but is unlikely to provide a quick solution to energy prices or staff shortages.
Right
Arguments The right will seize on the figures as an argument for less regulation, lower burdens and a stronger industrial policy. The warning about structural problems will be read as evidence that businesses need more room to invest and attract staff.
Values Economic freedom, competitiveness, national industry and lower administrative burdens.
Consequences Giving companies more room to manoeuvre could accelerate investment, but less regulation could shift social or environmental costs to workers and the state.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
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The growth percentages and the risks mentioned are drawn from the joint autumn forecast as reported by Tagesschau. The text consistently describes the estimates as forecasts and avoids predictions about individual Dutch companies.
- confirmed The German research institutes expect 1.3 per cent growth in 2026, compared with 0.6 per cent in the spring forecast. — This comparison appears in reporting on the autumn forecast. source
- confirmed Exports and manufacturing contributed to the higher estimate. — Tagesschau names both factors as reasons for the revised forecast. source
- confirmed For 2027 and 2028, the institutes expect growth of 1.1 and 0.4 per cent respectively. — These figures appear in the same autumn forecast. source
Editor's note
The growth percentages are forecasts by German research institutes, not definitive growth figures. The consequences for Dutch companies are contextual analysis and not a separate measurement.Sources
- Herbstprognose: Deutlich höheres Wirtschaftswachstum erwartet — Tagesschau
- Konjunkturtermine — Bundesministerium für Wirtschaft und Energie
- Gross domestic product in the 2nd quarter of 2026 up 0.2% — Destatis
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