Finance
German savings banks group forecasts 1% GDP growth in 2026
Published by Global Banking and Finance Review
Posted on January 26, 2026
2 min readLast updated: January 26, 2026
Quick Summary
Germany's savings banks forecast a 1% GDP growth in 2026, driven by state spending and trade deals, despite a fragile recovery.
Germany's Savings Banks Project Modest 1% GDP Growth for 2026
Economic Forecast for Germany
BERLIN, Jan 26 (Reuters) - Germany's economy is set for a modest rebound in 2026 after three years of stagnation, Germany's savings banks association DSGV said on Monday, forecasting gross domestic product growth of 1%.
Drivers of Growth
"A moderate upswing is a good sign, but the recovery remains fragile," DSGV President Ulrich Reuter said, warning that a significant share of growth would be driven by one-off state spending that does not fix structural weaknesses.
Global Context and Trade Partnerships
Early effects from a public financing package for infrastructure and climate, as well as higher defence outlays, are already visible, said Timo Plaga, chief economist at savings bank Sparkasse Hannover.
He estimated that 0.4 percentage points of this year's expected growth could stem from those measures, rising to about 0.5 percentage points next year.
Reuter called 2026 a potential turning point amid widening global tensions and urged Germany to seek new partnerships, citing the Mercosur trade deal as a key step toward a free-trade area of over 700 million people.
He said a failure would be a "bitter blow" and backed provisional application.
(Reporting by Maria Martinez, editing by Thomas Seythal)
Key Takeaways
- •Germany's GDP is expected to grow by 1% in 2026.
- •Growth driven by state spending and trade partnerships.
- •DSGV warns of fragile recovery despite growth.
- •Infrastructure and climate spending boost growth.
- •Mercosur trade deal seen as crucial for growth.
Frequently Asked Questions about German savings banks group forecasts 1% GDP growth in 2026
1What is economic growth?
Economic growth refers to an increase in the production of goods and services in an economy over a period of time, typically measured by the rise in GDP.
2What is structural weakness in an economy?
Structural weakness refers to inherent issues within an economy that hinder growth, such as outdated industries, lack of innovation, or inadequate infrastructure.
