German Economy Poised for Growth After Two Years of Contraction
Germany's economy is set to grow by 0.3% this year after two years of decline, according to DIW Berlin. This forecast upgrade stems from a strong first quarter and anticipates a 1.7% growth in 2026. A government investment package and improved financing conditions are expected to bolster momentum.
- Country:
- Germany
Germany's economic prospects have taken a positive turn, with growth projected to reach 0.3% this year after two years of contraction, according to DIW Berlin. This marks the fifth upward revision for the country's economic forecast in 2025 and 2026.
A better-than-expected first quarter, which saw the German economy grow by 0.4%, prompted the DIW to upgrade from its previous 0.1% growth forecast for 2025. The organization's chief economist, Geraldine Dany-Knedlik, highlighted the strong start to the year as a critical factor in averting another stagnation period.
The DIW report indicates that Germany's parliament-approved infrastructure spending surge, amounting to 500 billion euros, together with relaxed borrowing rules, is likely to provide significant economic momentum. Despite burdens from U.S. trade policy on German foreign trade, the economy is anticipated to grow by 1.7% next year.
(With inputs from agencies.)
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