FX.co ★ Germany Cuts 2026 GDP Growth Forecast to 1%

The German government has revised its GDP growth estimate for this year down to 1.0%, from an earlier projection of 1.3%, citing heightened uncertainty in international trade, as reported by Reuters. Despite this downward revision, the updated figure remains markedly higher than the 0.2% growth seen in 2025, which followed two years of economic contraction. The economy ministry, in its annual economic report released on Wednesday, noted, "The cyclical recovery is bolstered by stronger domestic momentum, while external challenges are somewhat diminishing." The forecast for GDP growth in 2027 has also been adjusted to 1.3%, down slightly from the previously anticipated 1.4%. Additionally, in a significant development, the national parliament approved a €500 billion ($598.35 billion) special fund for infrastructure in March. The report anticipates that fiscal policy measures will alone contribute about two-thirds of a percentage point to GDP growth in 2026.