Finance
German economy faces weak Q1 but rebound still coming, Bundesbank says
Published by Global Banking & Finance Review®
Posted on February 19, 2026
2 min readLast updated: February 19, 2026
Tags:GDP
Quick Summary
Bundesbank says Germany’s recovery continues but Q1 will be weak. A firmer upswing is expected from spring, led by fiscal stimulus; construction is weather-hit and export competitiveness stays soft.
Bundesbank Sees Weak Q1 for Germany, With Growth Picking Up From Spring
Bundesbank’s Q1 Assessment and Outlook
FRANKFURT, Feb 19 (Reuters) - The German economy continues to recover, although expansion in the first quarter will be weak, with a pickup expected only from the spring, the Bundesbank said in a monthly economic report on Thursday.
Labour market and savings
Government spending impact
Drivers of a Later Rebound
Germany, Europe's largest economy, has been stagnant for the past three years but a government spending spree, a strong labour market and pent-up household savings are fuelling optimism for a rebound.
"The economy is expected to continue its recovery in the first quarter, albeit with weak momentum," the Bundesbank said. "From spring onwards, the German economy is expected to grow more dynamically, driven primarily by fiscal stimulus."
Soft private consumption
Construction hit by weather
Near‑Term Headwinds
Construction is likely to take a hit from poor weather in the quarter and private consumption is unlikely to remain at an elevated level, the central bank said.
Export competitiveness risk
Defence and infrastructure demand
Industry Orders and Exports
While industry has seen some large orders, they are likely related to higher government spending on defence and infrastructure, and the sector's competitiveness on export markets remains relatively weak.
Below 1% projection
Second‑half skew
Full‑Year Growth Guidance
The Bundesbank earlier forecast German economic growth below 1% this year with most of that growth skewed towards the second half of the year.
(Reporting by Balazs Koranyi; Editing by Anil D'Silva)
Key Takeaways
- •Bundesbank expects Germany’s recovery to continue, but Q1 growth will be weak.
- •Stronger expansion is projected from spring, driven mainly by fiscal stimulus.
- •Construction activity is set to dip in Q1 due to poor weather conditions.
- •Private consumption may cool from recent highs despite a solid labor market.
- •Large industrial orders likely stem from defense and infrastructure outlays; export competitiveness remains soft.
Frequently Asked Questions about German economy faces weak Q1 but rebound still coming, Bundesbank says
1What is the main topic?
Germany’s economy is recovering, but the Bundesbank expects weak growth in Q1 with a stronger rebound from spring, supported chiefly by fiscal stimulus.
2When is growth expected to pick up?
The Bundesbank projects momentum to improve from the spring, with a more dynamic expansion in the following quarters.
3What factors are driving and restraining growth?
Fiscal stimulus and large public orders support growth, while poor weather weighs on construction, private consumption may cool, and export competitiveness remains weak.
