Major German Research Institutes Raise 2026 Growth Forecast to 1.3%
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Germany's leading economic research institutes on the 24th revised upward their forecasts for the country's economic growth, putting 2026 at 1.3% and 2027 at 1.1%. The 2026 forecast was raised from the previous 0.6%, and 2027 was revised up from 0.9%. Oliver Holtemöller of the Halle Institute for Economic Research said the economy is holding up more strongly than expected, while noting that persistently high energy prices and structural problems are limiting the foundation for recovery. The institutes forecast growth of just 0.4% in 2028, citing a shrinking labor force due to demographic change and a declining potential growth rate as constraining factors. Inflation is expected to rise to 2.8% in 2026 and 3.2% in 2027 before falling to 2.0% in 2028, while the unemployment rate is projected to decline from 6.4% in 2026 to 6.2% in 2027 and 5.8% in 2028. The forecasts were compiled jointly by the Leibniz Institute for Economic Research, the Ifo Institute, the Kiel Institute for the World Economy, the German Institute for Economic Research, and the Halle Institute for Economic Research.