Konjunktur: Hoffnung für die Wirtschaft: Ifo erhöht Prognose deutlich

The German Institute for Economic Research (DIW) has significantly increased its economic growth forecast, anticipating a 1.2% rise in Germany's economy in 2026, up from a previous prediction of only 0.5%. The institute now expects 1.0% growth for 2027 and 0.7% for 2028. This substantial revision is attributed to unexpectedly strong exports and a less severe energy price shock due to the Iran war.

DIW President Marcel Fratzscher attributes the positive economic momentum to public consumption and investment, with around 70% of this year's growth stemming from these sectors. Higher investments in infrastructure and defense also contribute to the growth. The recovery, however, remains fragile as private investments are insufficient to bolster Germany's competitiveness and innovation.

Global uncertainties also pose significant risks, including potential escalations in the Middle East or new trade conflicts. Despite these challenges, there is cautious optimism, as the German economy has grown for three consecutive quarters, with a 0.3% increase in the second quarter. However, DIW economist Geraldine Dany-Knedlik cautions that the economy may stagnate in the third quarter due to high energy prices and low water levels affecting the chemical and metal industries, particularly with soaring gas prices threatening winter.