Economic research institutes are sharply raising their growth forecast

The leading German economic research institutes have significantly increased their growth forecast for the current year: They expect gross domestic product to increase by 1.3 percent, as they explain in their joint autumn forecast.

The economic recovery would therefore be stronger than expected in the spring - at that time the forecast was 0.6 percent.

The institutes explained that exports and value creation in the manufacturing sector in particular had increased “surprisingly strongly”. Impulses came from the robust global economy and the global AI boom. Competitors from the Gulf region also had significant production problems because of the Iran war.

The energy price shock associated with the Iran war has slowed the German economy, but the higher prices for fuel and heating oil have so far had little impact on other consumer prices.

Overall recovery but weak

Nevertheless, the recovery remains weak overall, the economic researchers emphasized. The upswing is “on a thin foundation because high energy prices and structural problems are a burden,” explained Oliver Holtemöller from the Leibniz Institute for Economic Research in Halle. In the current quarter, low water levels are also temporarily slowing activity.

The institutes expect an increase of 1.1 percent for 2027, but only an increase in GDP of 0.4 percent for 2028 - then “the expansion will lose speed”.