Overview
- The Munich-based Ifo institute cut its GDP forecast to 0.1% for 2025 and 0.8% for 2026, with 2027 now seen at 1.1%.
- RWI and IfW issued parallel downgrades, projecting 0.1% growth in 2025 and roughly 1.0% in 2026, signaling a broad consensus on weak momentum.
- Ifo estimates higher US tariffs will subtract 0.3 percentage points from growth in 2025 and 0.6 points in 2026 by hurting exports.
- The government’s roughly €500 billion special fund is expected to lift output only with delay, adding about 0.3 points in 2026 and 0.7 in 2027.
- Corporate investment intentions have turned negative overall, with Ifo’s index at -9.2 and steep declines in autos and chemicals.