The German government lowered its gross domestic product (GDP) growth forecast for this year to 1.0% from an earlier forecast of 1.3%, reflecting greater uncertainty in international trade, as Reuters reported. However, the new figure is still significantly higher than the 0.2% expansion recorded in 2025, which followed two consecutive years of contraction. “The cyclical recovery is being supported by stronger domestic momentum, while external headwinds are easing somewhat,” the economy ministry said in its annual economic report published on Wednesday. Meanwhile, GDP growth in 2027 is seen at 1.3%, down from the previously expected 1.4%, according to the new forecasts. Meanwhile, the national parliament approved a landmark €500 billion ($598.35 billion) special fund for infrastructure in March. In 2026, fiscal policy measures alone are expected to contribute around two-thirds of a percentage point to GDP growth, according to the report.
