The German central bank expects the German economy to gradually recover, with a growth of 0.6% projected for 2026.

The German Federal Bank stated in its economic forecast report released on the 19th that after years of economic downturn, the German economy will gradually recover by 2026. Bundesbank President Weidmann said that the economic recovery at the beginning of 2026 will still be modest, but from the second quarter onwards, the expansion of government spending and a rebound in exports will significantly boost economic growth. The Federal Bank predicts that after calendar adjustments, Germany's GDP will grow by 0.6% in 2026, 1.3% in 2027, and 1.1% in 2028. The bank pointed out that expansionary fiscal policy can help boost the economy in the short term, but its role in improving long-term production potential is limited, and structural reforms still need to be pursued. On the fiscal side, increased spending on defense and infrastructure will raise deficits and debt levels. It is expected that by 2028, the German government fiscal deficit will reach 4.8%. The German Federal Bank reiterated the need to further improve debt brake mechanisms and gradually reduce deficits from 2030 onwards, gradually reducing debts related to defense spending.