Germany's IfW Raises 2026 Growth Forecast Amid Anticipated Public Spending Boost

The IfW economic institute in Germany has increased its 2026 growth estimate for the country's economy. The institute now projects a 1.5% increase in gross domestic product, up from the previous forecast of 0.9% in December. The revised forecast anticipates a boost from increased public spending championed by Friedrich Merz, the likely next chancellor. Merz is seeking support for a significant increase in state borrowing to bolster defense and infrastructure investments. IfW confirmed its projection for Germany's economy to stagnate in 2025, citing ongoing structural problems and international competition.