Overview

• KfW now projects real GDP growth of 0.2% in 2025 after previously expecting stagnation.
• KfW Research lifts its 2026 forecast to 1.5% from 0.5%, signaling a firmer expansion next year.
• Chief economist Dirk Schumacher expects a first cyclical boost in the fourth quarter from the federal government's investment offensive.
• Early indicators show rising loan demand from companies and households, supporting the improved outlook.
• KfW says firms have weathered President Donald Trump’s tariff increases since spring better than feared, and notes that other institutes and the Bundesbank share the more optimistic view.