German chamber of commerce raises 2026 growth outlook to 1%

The German Chamber of Commerce and ‌Industry on Thursday raised its 2026 growth outlook for Europe's largest economy to 1% from 0.3% but saiddebt-financed public spending was largely driving the expansion. "The government is spending money on infrastructure and defence, and exports are providing some ‌tailwind. We are still a long way from self-sustaining growth," said the chief executive of the lobby group, ‌Helena Melnikov, in a statement.

In its poll of 23,000 German businesses, 26% of respondents rated their current business situation as good, up 3 percentage points from early summer, while 23% of companies rated it as poor. Analysts broadly agree that Germany is emerging from a prolonged ⁠slowdown, ​but many stop short ⁠of calling the recovery self-sustaining because private investment remains weak.

The German government expects the economy to grow by 1.3% in 2026 and 1.1% ⁠in 2027, while the chamber of commerce sees 2027 growth at 1%. Despite higher prices fueled by the Iran conflict ​and uncertainty caused by trade tensions, the German economy has shown resilience and grew by 0.2% in the ⁠third quarter.

AUTOMAKERS IN CRISIS But that growth is overshadowed by a deep crisis in Germany's auto industry, a traditional pillar of the ⁠economy, ​as it struggles with US tariffs, growing competition from cheaper Chinese imports and a costly shift to electric vehicles.

In September, the sector's new orders rose by 10.5%. But the statistics office said on Thursday that ⁠the increase reflected weak orders in previous months, caused in part by production changes and plant shutdowns during the ⁠summer holiday season. The rise ⁠in auto industry orders contributed to a 4.4% increase in overall industrial orders on a seasonally and calendar-adjusted basis.

A Reuters poll of analysts had pointed to a ‌rise of 4.8%.