The OECD expects the global economy to grow by 2.9 and 3.0 percent in 2026 and 2027. According to experts, exports are also growing surprisingly strongly due to the AI boom.
Berlin. The OECD has significantly increased its growth forecast for the German economy this year. Gross domestic product will grow by 1.1 percent, the Paris-based Organization for Economic Cooperation and Development (OECD) predicted on Wednesday. In June, only an increase of 0.7 percent was expected. The forecast for 2027 was also left at 1.1 percent.
"Exports rose surprisingly sharply in the first half of 2026, which is due, among other things, to the increasing demand for electronic products and equipment in the wake of the AI boom," OECD expert Robert Grundke told the Reuters news agency about the more optimistic outlook. This is likely to remain high.
“Increasing public investments in defense and infrastructure have also contributed to the economic recovery,” added Grundke. The OECD also referred to reforms in the area of public procurement and the acceleration of planning and approval procedures for infrastructure projects. This means there are good opportunities for a faster expansion of the public infrastructure and greater support for growth.
“Advancing reforms”
The OECD advises not to let up. "Even if the economic outlook has improved, it is important to advance the necessary structural reforms in order to improve the long-term growth potential of the German economy," emphasized Grundke. Barriers to competition should be reduced and the high administrative burden further reduced in order to make it easier for new companies and investments to enter the market.
Existing regulations and administrative procedures would need to be reviewed, simplified and harmonized. Restrictions such as the requirement for master craftsmen in many trades should be reduced and the digitalization of public administration accelerated.
The OECD also advises improving incentives in the tax and transfer system. This included a reform of spousal splitting, a restriction of mini-jobs to students and pupils and the implementation of the planned welfare state reform.
"From the OECD's perspective, reducing the tax burden on labor income would be another important measure to increase the labor supply and alleviate the shortage of skilled workers," emphasized Grundke. This could be financed by eliminating tax breaks and exemptions.
Concerns about the conflict in the Middle East
OECD expert Isabell Koske also warns of risks to the upswing. "A longer duration or further escalation of the conflict in the Middle East would lead to higher energy prices and greater price inflation as well as a loss of confidence, which would weigh on private consumption and investment," she emphasized.
"This is all the more true as the gas storage levels in Germany and Europe are below the average of the last two years." Falling profit expectations in the AI industry could lead to falling stock prices, weaker consumer and investor confidence and lower export demand, Koske said.
The OECD expects the global economy to grow by 2.9 and 3.0 percent in 2026 and 2027. While higher interest rates and weaker purchasing power are slowing things down, investments in artificial intelligence (AI) are intended to support the economy. Growth of 2.2 and 2.1 percent is expected for the USA and 1.0 percent for the euro zone. In China, growth is likely to slow to 4.5 and 4.2 percent.
