Overview
- On Thursday, October 8, 2026, the Federal Ministry for Economic Affairs published its Herbstprojektion raising GDP growth to 1.3% for 2026, 1.1% for 2027 and projecting a slowdown to 0.6% in 2028.
- The ministry and several institutes say the stronger 2026 outcome is driven mainly by a one-off boost in exports and large, debt-financed special funds for defence and infrastructure.
- Ministers, business groups and analysts warned the recovery is fragile, citing risks from the conflicts in the Middle East and Ukraine, higher energy prices and weak private investment and consumption.
- The projection has intensified calls inside the governing coalition for structural reforms on labour, bureaucracy, energy costs and social finances even as political disputes have stretched the reform timetable.
- Longer-term concerns persist because recent growth is largely state-led rather than private-sector driven, leaving Germany vulnerable to demographic decline, falling labour supply and a return to low trend growth.