German economic growth forecasts raised by major institutes

Leading economic institutes have significantly raised their growth forecasts for the German economy. The Ifo Institute now projects a GDP increase of 1.4 percent for the current year, a revision of 0.6 percentage points higher than its previous estimate. Looking ahead, the institute anticipates growth of 1.2 percent in 2027 and 0.8 percent in 2028.

Other major research bodies have also adjusted their outlooks upward. The Leibniz Institute for Economic Research Halle (IWH) raised its forecast to 1.4 percent, while RWI Essen and the Kiel Institute for the World Economy both projected growth of approximately 1.3 percent. If realized, this would represent the strongest expansion since 2022.

Economic experts attribute this improved outlook to several factors, including strong foreign demand, an international investment boom in artificial intelligence, and expansive fiscal policy. Additionally, the negative impact of energy price shocks is expected to be less severe than previously anticipated. However, inflation is projected to rise to between 2.8 and 3.0 percent, which may continue to dampen consumer spending.