Joint economic forecast: The economy is doing better than expected

dpa | The leading economic research institutes have significantly increased their growth forecast for the current year: They expect gross domestic product to increase by 1.3 percent. They explained this in their joint diagnosis on Thursday. The recovery is stronger than expected in the spring - at that time their forecast was 0.6 percent.

The mood among German companies has also brightened, as shown by the Ifo index, which was also published on Thursday. The Munich institute, which is also involved in the joint diagnosis, uses this to map the so-called business climate based on a survey of 9,000 managers. It rose for the fifth time in a row in September. Experts believe this is a sign that the economy is more resilient than often portrayed.

The institutes now explain that the German economy developed significantly more strongly in the first half of 2026 than expected in the spring. In particular, exports and value creation in the manufacturing sector increased “surprisingly strongly”. Impulses came from the robust global economy and the global AI boom; At the same time, competitors from the Gulf region were exposed to significant production disruptions as a result of the Iran War.

According to the joint diagnosis, the state also bought heavily. However, corporate investment and private consumption remained weak. The energy price shock associated with the Iran war has slowed the German economy, but the higher prices for fuel and heating oil have so far hardly spread to other consumer prices.

Nevertheless, the recovery remains weak overall, the economic research institutes emphasized. The upswing is “on a thin foundation because high energy prices and structural problems are a burden,” explained Oliver Holtemöller from the Leibniz Institute for Economic Research in Halle. In the current quarter, low water levels are also temporarily slowing activity.

For the coming year, the institutes - which, in addition to those in Munich and Halle, include the German Institute for Economic Research in Berlin, the Kiel Institute for the World Economy, the RWI Leibniz Institute for Economic Research in Essen and the Austrian Institute for Economic Research in Vienna - expect an increase of 1.1 percent, and for 2028 only an increase in gross domestic product of 0.4 percent. “In 2028, the expansion will slow down,” explained the researchers.