The German government has lowered its economic growth forecast for 2026 to 1%.

The German Federal Government released its annual economic report on January 28, predicting that the German economy will grow by 1% in 2026, down 0.3 percentage points from the forecast in the previous autumn. German Federal Minister for Economic Affairs and Energy, Katerina Laich, said at the report's release that one of the main reasons for the downward revision was that the economic recovery in the second half of 2025 was weaker than expected. In addition, the massive fiscal spending by the federal government in infrastructure and defense sectors did not have the expected stimulating effect on the economy.