Overview
- The IMF now projects German GDP growth of 1.1% in 2026, up from 0.9% in October, and keeps its 2027 outlook at 1.5%.
- The revision reflects anticipated short‑term support from billion‑euro public spending that helps offset the dampening effect of US tariffs.
- On these projections, Germany is no longer the G7 laggard, with Japan and Italy at 0.7% and France at 1.0%.
- The IMF stance is more upbeat than forecasts from the Bundesbank and the Ifo Institute but trails the federal government’s 1.3% projection.
- The fund also nudged up 2026 growth for the eurozone to 1.3% and the world to 3.3% while warning of risks from a potential AI bubble, worsening trade conflicts, and geopolitical or domestic political tensions.