Germany's Leading Research Institutes Raise 2026 Growth Forecast to 1.3%

Germany's five leading economic research institutes — DIW Berlin, the Ifo Institute, the Kiel Institute (IfW), IWH Halle and RWI Essen — jointly raised their 2026 GDP growth forecast to 1.3% in their autumn joint forecast (Gemeinschaftsdiagnose), published September 24, 2026, more than double the 0.6% they had projected in spring. They also lifted their 2027 forecast to 1.1% (from 0.9%) but see growth slowing to 0.4% in 2028. The upgrade reflects stronger-than-expected exports and manufacturing output in the first half of 2026, resilient global demand and gains from the AI boom; the Ifo institute's business expectations index climbed to 90.4 in September, its strongest reading since late 2025. The institutes cautioned the recovery rests on a narrow base, with elevated energy prices, weak household consumption and structural competitiveness problems still weighing on the economy, and forecast inflation rising to 2.8% in 2026 and 3.2% in 2027 before easing to 2.0% in 2028.