The German government raises its economic growth forecast for 2026

China News Service, Berlin, October 8 (Reporter Ma Xiuxiu) The German federal government released its autumn economic forecast on the 8th, predicting that the German economy will grow by 1.3% in 2026, a significant increase from the 0.5% growth predicted in the spring of April this year.

The report pointed out that the war in Iran and the sharp rise in energy prices initially had a significant impact on the German economy, but the German economy has shown greater resilience than previously expected. Among them, export growth, government investment and increased defense spending are the main factors driving economic growth.

The report also predicts that the German economy will grow by 1.1% in 2027 and only 0.6% in 2028.

The report believes that the future trend of the German economy depends to a large extent on the development of geopolitical conflicts in the Middle East and Ukraine. If these crises are resolved in a lasting way, energy prices are expected to fall, speeding up the economic recovery. On the other hand, if prices remain high, they will continue to impose a burden on businesses and private households.

German Federal Minister of Economic Affairs and Energy Katerina Reich said that Germany has emerged from its economic trough. The key now is to turn economic recovery into a driving force for sustained growth. To this end, Germany needs to further promote reforms.

In response to the German government's upward revision of its economic growth forecast, the German business community warned against being overly optimistic. Falk Treyer, director of foreign trade at the German Chamber of Commerce and Industry, said that German export growth still lacks endogenous momentum. Uncertainty over trade policy and the structural disadvantages faced by Germany as a base for investment and production are once again weighing on the export industry.

Helena Melnikov, general manager of the German Chamber of Commerce and Industry, pointed out that the current economic recovery mainly relies on the growth of exports to the EU internal market and government spending that relies on debt financing. Without substantive economic policy reforms, this recovery will be unsustainable.