Berlin economy outpaces Germany, ministry calls outlook robust

The Berlin Investment Bank (IBB) lowered its 2026 growth forecast for the city to 1.5%, but still expects Berlin’s economy to expand faster than the national average for the 13th consecutive year. While Germany’s GDP is projected to rise only about 0.5‑0.6%, Berlin’s growth is driven by a strong services sector and a rebound in construction, according to IBB chief Hinrich Holm.

IBB highlighted external pressures such as high energy prices and Middle‑East geopolitical tensions, urging “smart investments” in housing, digitalisation and a climate‑neutral transformation to boost resilience. Berlin’s economy minister Franziska Giffey echoed the positive outlook, citing continued strength in services and a turnaround in building activity.

At the federal level, Economics Minister Katherina Reiche described the overall German economic situation at the start of the year as “stable” and “robust,” reinforcing the view that the country’s economy is holding up despite the headwinds.