Germany More Than Doubles 2026 GDP Forecast to 1.3% as Manufacturing Rallies

Germany's Economy Ministry more than doubled its growth forecast for 2026, now projecting GDP to expand by 1.3%, up from a prior estimate of 0.5%, driven by a stronger-than-expected first half of the year marked by robust exports and a surge in government spending. The 1.3% expansion would be the fastest rate of growth since 2017, according to the ministry's autumn projection.

The upgraded outlook extends into 2027 as well, with the ministry raising that year's forecast to 1.1% from 0.9%. Growth is then expected to slow to 0.6% in 2028, as the ministry cautions that volatile geopolitics and elevated energy prices remain ongoing headwinds for the economy.

The revision stands in sharp contrast to Germany's recent economic struggles, which included two years of recession followed by weak growth of 0.2% in 2025. The manufacturing sector's rally was cited as a central driver of the improved near-term outlook, outweighing continued weakness in consumer activity.