The German economy grew by 0.2% quarter-on-quarter in Q3 2026, easing slightly from 0.3% in Q2 but beating market expectations of a 0.1% increase, according to preliminary estimates. Final consumption expenditure rose modestly compared with the previous quarter, while capital formation declined. At the same time, the strong export momentum seen in the first half of the year weakened significantly in Q3 2026.
On an annual basis, GDP expanded by 1.2%, the fastest year-on-year growth rate in four years. This compares with 1.0% in Q2 and exceeds the consensus forecast of 1.1%. Reflecting the improved outlook, the German government has revised its projections for economic growth up to 1.3% for 2026 and 1.1% for 2027, from its April estimates of 0.5% and 0.9%, respectively.
