24.09.2026 • 28/2026
Joint Economic Forecast Autumn 2026: Recovery under structural stress – fiscal policy on slippery ground
The German economy has been recovering since the end of 2025. This recovery, although stronger than expected in spring, remains modest. The leading economic research institutes expect GDP growth of 1.3% for the current year and 1.1% and 0.4% for the following two years, respectively. Compared with the spring forecast, the outlook for 2026 has been revised upward by 0.7 and that for 2027 by 0.2 percentage points. “The economy has developed more robustly than expected. However, the recovery rests on a narrow foundation, as high energy prices and structural problems continue to weigh on economic activity,” says Oliver Holtemöller, Head of Macroeconomic Forecasting at the Halle Institute for Economic Research (IWH). In the current quarter, low water levels are also temporarily dampening economic activity. The government deficit continues to increase, leading to a growing need for fiscal consolidation.
Oliver Holtemöller
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01.04.2026 • 9/2026
Energy price shock dampens recovery – inflation rises
Although the leading economic research institutes consider the German economy to be in a recovery phase following a downturn lasting several years, they nevertheless expect only a moderate increase in gross domestic product of 0.6% for 2026 and 0.9% for 2027. “The energy price shock triggered by the Iran war is hitting the recovery hard, but at the same time expansionary fiscal policy is bolstering the domestic economy and preventing a stronger slide,” says Timo Wollmershäuser, Head of Forecasts at the ifo Institute. The institutes estimate that the inflation rate will rise to an average of 2.8% in 2026 and 2.9% in 2027.
Oliver Holtemöller
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12.03.2026 • 8/2026
Oil price shock threatens recovery in Germany
Globally rising energy prices in the wake of the new Gulf War are clouding the outlook for the German economy. Nevertheless, increased public expenditure is expected to support economic activity both this year and next. According to the spring forecast of the Halle Institute for Economic Research (IWH), output is projected to grow by 0.7% in 2026 and by 1.0% in 2027. We expect similar rates of expansion for East Germany. In December, the IWH economists had predicted growth of 1.0% for both 2026 and 2027.
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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Einhaltung der EU-Fiskalregeln erfordert umfangreiche Konsolidierung — Mittelfristige Projektion der gesamtwirtschaftlichen
Entwicklung und der öffentlichen Finanzen in Deutschland
Andrej Drygalla, Katja Heinisch, Oliver Holtemöller, Axel Lindner, Christoph Schult, Götz Zeddies
IWH Policy Notes,
No. 1,
2026
Abstract
Der Beitrag untersucht die mittelfristige Entwicklung der deutschen Wirtschaft und der öffentlichen Finanzen vor dem Hintergrund der seit 2025 geltenden neuen EU-Fiskalregeln und der jüngsten Lockerung der nationalen Schuldenbremse. Im Mittelpunkt steht die Frage, ob und unter welchen Bedingungen Deutschland die europäischen Vorgaben zu Defizit, Schuldenstand und Nettoprimärausgaben einhalten kann.
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