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German institutes raise 2026 and 2027 economic growth forecasts, sources say - Finance news and analysis from Global Banking & Finance Review
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German institutes raise 2026 and 2027 economic growth forecasts, sources say

Published by Global Banking & Finance Review

Posted on September 22, 2026

2 min read

· Last updated: September 22, 2026

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German Economic Institutes Lift 2026 and 2027 Growth Forecasts, Expect Slow 2028

Revised Economic Growth Projections for Germany

By Klaus Lauer

Upward Revisions for 2026 and 2027

BERLIN, Sept 22 (Reuters) - Germany's leading economic institutes have raised their forecasts for economic growth in Europe's largest economy for this year and next but expect only meagre growth in 2028, sources told Reuters on Tuesday.

2026 Growth Forecast

The German economy is forecast to grow 1.3% in 2026, compared with an earlier forecast of 0.6%, the sources said.

2027 Growth Forecast

For 2027, the institutes forecast growth of 1.1%, up from an earlier projection of 0.9%, according to the sources.

Handelsblatt first reported on the forecasts for 2026 and 2027 on Monday.

Outlook for 2028 and Structural Challenges

2028 Growth Expectations

The institutes expect growth of only 0.4% in 2028, sources told Reuters.

Structural Problems and Policy Concerns

The forecasts will be officially presented on Thursday, under the title "An economic upturn marred by structural problems – fiscal policy on the wrong track," sources said.

Impact on Political Landscape

Germany's sluggish economy has been a big issue in the country's recent regional elections that have resulted in big gains for the far right and far left.

Institutes Involved in the Forecast

The forecasts are a joint effort by five prominent economic institutes - RWI in Essen, the Ifo institute in Munich, IfW in Kiel, IWH in Halle and DIW in Berlin.    

Recent Developments and Reporting

Recent Upward Revisions

Several economic institutes had recently raised their forecasts, following a stronger-than-expected first half of the year.

Reporting Credits

(Reporting by Klaus Lauer, writing by Maria MartinezEditing by Ludwig Burger)

Key Takeaways

  • Joint forecast by five institutes (RWI, Ifo, IfW, IWH, DIW) upgraded 2026 growth to 1.3% from 0.6% and 2027 to 1.1% from 0.9% (in.marketscreener.com).
  • Earlier in the season, several individual institutes—including IMK, IW, Ifo, and DIW—had already lifted their forecasts, supported by solid Q2 data and robust fiscal spending (investing.com).
  • Despite the rebound, growth is expected to slow sharply to just 0.4% in 2028, underscoring lingering structural issues like demographic decline, industrial competition, and weak consumption (in.marketscreener.com).

References

Frequently Asked Questions

Why did the German institutes raise their growth projections?
Forecasts were raised due to a stronger-than-expected first half of the year.
What factors are affecting Germany's long-term economic outlook?
Structural problems and current fiscal policies are seen as limiting long-term growth.

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