Germany's RWI Raises Economic Growth Forecasts for 2026 and 2027 on Strong Recovery
Revised Economic Outlook and Contributing Factors
By Maria Martinez
Upward Revisions in Growth Forecasts
BERLIN, Sept 3 (Reuters) - Germany's RWI economic institute sharply raised its growth forecasts for Europe's largest economy on Thursday, after exports and higher government spending drove a stronger-than-expected recovery in the first half of the year.
2026 and 2027 GDP Projections
Germany's economy will grow by 1.3% in 2026, RWI said, upwardly revising its forecast of 0.8% growth in June.
It expects gross domestic product to expand by 1.1% in 2027, also up from its earlier 0.8% forecast, before growth slows to 0.5% in 2028.
Other Institutes' Forecasts
The DIW Berlin economic institute also raised its forecasts for the German economy on Wednesday.
Key Drivers and Ongoing Challenges
Export Performance and Economic Resilience
Despite higher prices due to the Iran conflict and uncertainty caused by U.S. tariffs, the German economy has shown resilience and grew by 0.3% in the second quarter, supported by a strong increase in exports.
Temporary Nature of Export Gains
RWI cautioned that export momentum would likely weaken later this year, saying recent gains reflected temporary effects, including a rebound after tariff-related disruptions, rather than a lasting improvement in German competitiveness.
Structural Issues Impacting Growth
"The recovery is here, but the structural problems have not disappeared," RWI economic chief Torsten Schmidt said.
High energy prices, bureaucracy and weak competitiveness continue to weigh on investment, while private consumption remains subdued due to labour-market uncertainty, RWI said.
(Reporting by Maria Martinez, Editing by Miranda Murray)
