Overview
- The Abgabenquote is projected at 41.5% of GDP in 2025, edging to 41.4% in 2026, according to the Institut der deutschen Wirtschaft.
- Government outlays are set to push the Staatsquote to 51.1% in 2026, a level previously topped only in 1995 and matched in 2020.
- IW expects GDP growth of 0.1% in 2025 and 0.9% in 2026, with roughly one-third of the 2026 gain attributed to a calendar effect with more working days.
- Private consumption is seen growing about 1% as employment prospects soften, while a slight export increase is offset by continued strong import growth.
- IW’s Michael Grömling cites higher defence and infrastructure investment together with rising pension, health, and unemployment insurance obligations as key drivers.