Overview
- The five leading research institutes raised their joint 2026 growth forecast to 1.3% and 2027 to 1.1%, and the OECD raised its 2026 forecast to 1.1%, revisions published on Thursday that reverse spring downgrades.
- Institutes and the OECD say the surprise improvement was driven mainly by stronger exports, higher government spending for infrastructure and defence funded from special borrowing, and extra demand tied to a global AI investment boom.
- Researchers warn the rebound rests on a narrow foundation because high energy prices, logistics hits such as low Rhine water levels, weak private consumption and demographic limits could quickly reverse gains.
- A significant share of near‑term growth comes from debt‑financed special funds, which pushes the financing deficit higher and creates pressure for fiscal consolidation under European rules as interest costs rise.
- Economists say durable growth will require faster structural reforms to boost private investment and labour supply, and they expect expansion to slow sharply to about 0.4% by 2028 if policy and energy risks are not addressed.