Overview

• After two recession years, the joint autumn report projects GDP growth of 0.2% in 2025, followed by 1.3% in 2026 and 1.4% in 2027.
• The rebound is seen as driven largely by a 12‑year, €500 billion Sondervermögen for infrastructure and climate projects, with lengthy planning and procurement cited as execution risks.
• The institutes say the upturn will not last without structural overhauls, pointing to high energy and unit‑labour costs, skills shortages and eroding international competitiveness.
• Their 12‑point agenda includes stabilising social contributions, slowing pension increases relative to nominal wages, stronger work incentives for older workers, market‑based energy pricing, leaner bureaucracy and faster recognition of foreign qualifications, plus advancing the EU‑Mercosur deal.
• Risks highlighted include weaker foreign demand under higher US tariffs, a trade group’s forecast of a 2.5% export drop in 2025, unemployment topping three million in August, and warnings that looser fiscal rules could erode potential growth and heighten debt and inflation pressures.