BERLIN (AP) – The German government on Wednesday cut its 2026 forecast for Europe’s largest economy, saying growth will accelerate more slowly than previously expected.
Chancellor Friedrich Merz’s government currently expects gross domestic product to expand by about 1% this year and 1.3% in 2027, Economy Minister Katerina Reich said. Octoberhad predicted growth of 1.3% and 1.4%, respectively.
the economy is back to normal slow growth It fell by 0.2% last year, after two consecutive years of contraction, according to preliminary official figures released two weeks ago.
Merz’s coalition government took office in May and has made economic revitalization one of its priorities. We have launched a program called encourage investmentestablishes a 500 billion euro ($596 billion) fund to funnel money to Germany’s squeamish Infrastructure for the next 12 years and paved the way for increased defense spending. There is a movement to provide subsidies. energy prices For heavy industry, it will eliminate red tape and accelerate the country’s lagging digitalization.
“The rather conservative estimate is due to the fact that the expected impetus from monetary and economic policy measures did not materialize as quickly and to the extent that we had expected,” Reisch told reporters. But he said the data now showed a “clear recovery.”
Germany has expanded its exports over the years, dominating global trade in manufactured goods such as industrial machinery and luxury cars. However, it is beset by increasing competition from Chinese companies, rising energy costs due to Russia’s full-scale invasion of Ukraine, and a number of other factors that increase risks. donald trump’s Tariffs and trade threats.
