"The Bundesbank now predicts GDP will expand by 0.6 percent in 2026, down from a June forecast of 0.7 percent. Growth is expected to pick up to 1.3 percent in 2027, it said. Bundesbank President Joachim Nagel said that next year's recovery will be driven by "public spending and a rebound in exports," as major government outlays on infrastructure and the military start impacting the broader economy."
"The country experienced two years of recession in 2023 and 2024 and is expected to post minimal growth this year of just 0.2 percent, according to the Bundesbank. Carsten Brzeski, an economist at ING, said the Bundesbank might be overly pessimistic about the chances of a rapid recovery in the coming year. Brzeski said the central bank appears to be "underestimating the ketchup bottle effect" of all the extra government spending: "Nothing happens for a long time, but then suddenly everything shoots out.""
Germany's central bank projects GDP growth of 0.6 percent in 2026 and 1.3 percent in 2027, signaling a gradual recovery after three years of stagnation. Next year's recovery is expected to be driven by public spending and a rebound in exports as major government outlays on infrastructure and the military begin to affect the broader economy. Early signs of the added spending are already visible but will provide more significant support during the coming year. Companies are likely to increase investments despite global uncertainty. The Bundesbank's 2026 forecast is lower than the IMF and several German institutions. Germany experienced recessions in 2023 and 2024 and faces minimal growth this year.
Read at The Local Germany
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