FX.co ★ German Economic Council Cuts 2026 Growth Forecast to 0.9%

The German Council of Economic Experts has revised its forecast for Germany's economic growth in 2026, reducing it from 1.0% to 0.9%. This adjustment, announced on Wednesday, reflects the council's view that the spending initiatives introduced by Chancellor Friedrich Merz's administration will have limited influence on growth. Despite Merz's promises to rejuvenate Europe's largest economy, this revision underscores ongoing challenges. As reported by Reuters, the council's chair, Monika Schnitzer, emphasized the need for Germany to explore new avenues for growth and security in view of these challenges. She stressed the importance of utilizing the special fund dedicated to infrastructure and climate neutrality effectively. Following his February election victory, Merz expanded Germany's fiscal capabilities through significant reforms, including a substantial €500 billion ($583 billion) fund for infrastructure investments. Nevertheless, there is criticism that some of these funds are being allocated to routine expenditures rather than transformative growth-oriented projects.