Joint Economic Forecast Spring 2026

Energy Price Shock Dampens Recovery – Inflation Rises

Although the leading economic research institutes consider the German economy to be in a recovery phase following a downturn lasting several years, they nevertheless expect only a moderate increase in gross domestic product of 0.6 percent for 2026 and 0.9 percent for 2027.

“The energy price shock triggered by the Iran war is hitting the recovery hard, but at the same time expansionary fiscal policy is bolstering the domestic economy and preventing a stronger slide,” says Timo Wollmershäuser, Head of Forecasts at the ifo Institute. The institutes estimate that the inflation rate will rise to an average of 2.8 percent in 2026 and 2.9 percent in 2027.

Full report available here

About the Joint Economic Forecast

The Joint Economic Forecast is published twice a year on behalf of the German Federal Ministry for Economic Affairs and Energy. The Institute for Advanced Studies (IHS) takes part in the publication as the partner institute of RWI Leibnitz-Institute for Economic Research.

Back