03.09.2026 • 25/2026
Economic Outlook: German economy on a recovery path – Tailwinds from the global economy and fiscal policy
An increase in foreign demand has put the German economy on a recovery path in the first half of the year, despite higher energy prices. In the coming quarters, rising public investment is expected to support economic activity. According to the autumn forecast of the Halle Institute for Economic Research (IWH), gross domestic product (GDP) is projected to grow by 1.4% this year and by 0.8% in 2027. Economic recovery in eastern Germany is expected to be somewhat weaker. In June, the IWH economists had predicted growth of 0.9% for both this and the next year.
Oliver Holtemöller
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11.06.2026 • 17/2026
Economic Outlook: Between Energy Crisis and AI Boom
Until the outbreak of the energy crisis, the German economy was on a path to recovery. Now the recovery will only continue over the course of 2026 if the Gulf conflict eases and energy prices do not rise further. This assumption underlies the present summer forecast of the Halle Institute for Economic Research (IWH). In that case, German output is expected to increase by 0.9% for this year and for 2027. Growth rates in East Germany will be similar. In March, the IWH economists had predicted growth of 0.7% for 2026 and 1% for the next year.
Oliver Holtemöller
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14.01.2026 • 2/2026
Compliance with the EU fiscal rules requires extensive consolidation – Medium-term projection of macroeconomic developments and public finances in Germany
Germany faces considerable structural burdens from both macroeconomic and fiscal perspectives, as potential growth is likely to be significantly lower than in past decades. A projection by the Halle Institute for Economic Research (IWH) on macroeconomic developments up to the year 2040 shows that, under unchanged fiscal policies, public debt can be expected to continue rising. The federal government's fiscal-structural plan assumes compliance with EU requirements, but this is only achievable under the assumption of high global spending cuts that have not yet been specified in detail.
Oliver Holtemöller
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The Health Costs of Losing Political Representation: Evidence From U.S. Presidential Elections
Sris Chatterjee, Iftekhar Hasan, Stefano Manfredonia
Plos One,
Vol. 20 (10),
2025
Abstract
We investigate whether a change in political leadership affects health outcomes. To do so, we exploit turnover elections that move partisan individuals into and out of alignment with the party of the President. We document that the lack of political alignment has a negative, immediate, and long-lasting effect on health. We do not find any evidence that our results can be explained by other confounding trends or by changes in economic outcomes or other economic policies. Further results suggest that political sentiments and social isolation are important potential mechanisms in this setting and that lack of political representation affects the mental health of individuals.
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