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5d ago

Germany’s Economy Set to End Three-Year Stagnation With 2026 Growth Revival

A €500 billion investment package with tax cuts aims to bolster domestic demand; President Trump’s tariffs continue to threaten export prospects.

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Bild mit Symbolcharakter: Kanzler Friedrich Merz (CDU) spricht an Bord eines Airbus. Der Flugzeughersteller mit stiller staatlicher Beteiligung könnte als Vorbild dafür dienen, wie die Bundesregierung wichtige Unternehmen in Deutschland hält.
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Overview

  • Leading research institutes now project German GDP growth of between 1.1 percent and 1.7 percent in 2026 after three years of near-zero expansion.
  • The government’s fiscal measures, including a €500 billion infrastructure fund over 12 years and targeted tax relief, are estimated to add about €10 billion in stimulus this year and €57 billion in 2026.
  • Early-2025 data show output up 0.4 percent, driven largely by stronger private consumption and rising business investment.
  • President Trump’s existing import tariffs could reduce German growth by 0.1 percentage point in 2025 and by 0.3 points in 2026 if they remain at current levels.
  • The OECD urges Germany to pursue structural reforms—streamlining healthcare, cutting bureaucracy and overhauling the tax system—to secure long-term growth potential.