German institutes raise 2026 and 2027 economic growth forecasts, sources say

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

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 2027on Monday.

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

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. 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.

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