German Economy: New Growth Forecasts
The German Institute for Economic Research (DIW) has significantly raised its growth forecasts for the German economy for the years 2025 and 2026. These adjustments are of considerable importance for the medium to long-term economic perspective and could have positive effects on market development and investor sentiment.
Forecasts for 2025 and 2026
- 2025: The DIW expects a growth of real Gross Domestic Product (GDP) of 0.3 percent for the year 2025. This represents an increase from the previous forecast of 0.0 percent.
- 2026: A significant growth of 1.7 percent is expected for 2026. This is an increase of 0.6 percentage points compared to the previous forecast of 1.1 percent.
Reasons for the Increase in Forecasts
The increase in forecasts is primarily attributed to the planned investment package from the federal government. This package aims to strengthen infrastructure in particular and is an important factor for the expected economic upswing. Additionally, the financing conditions are improving, which also contributes to positive growth.
Comparison with Other Forecasts
Other economic institutes have also adjusted their forecasts for 2026:
- Kiel Institute for the World Economy (IfW): Expects a growth of 1.6 percent.
- Munich Ifo Institute: Predicts a growth of 1.5 percent, which is nearly double the originally assumed 0.8 percent.
- Leibniz Institute for Economic Research in Essen (RWI): Also expects a growth of 1.5 percent.
- Leibniz Institute for Economic Research in Halle (IWH): Assumes a growth of 1.1 percent.
Impacts on Private Investors and Savers
The increased forecasts could encourage private investors and savers to rethink their investment strategies. An anticipated economic upswing could lead to improved returns on investments, particularly in sectors that benefit from the investment packages. However, potential risks, such as U.S. trade policies and global trade dynamics, should also be considered.