German Economic Institute Doubles Its Growth Forecast for the Economy

Berlin, Sept 2 (KUNA) -- The German Institute for Economic Research (DIW) on Wednesday more than doubled its forecast for German economic growth, driven by strong performance in the first half of 2026. According to a report by the institute, the growth forecast for this year was raised to 1.2 percent, and to 1 percent for next year. In June, the institute had projected growth of 0.5 percent for 2026 and 0.8 percent for 2027. DIW experts attributed the upward revision to robust foreign trade at the start of the year, as well as the impact of energy prices stemming from the Iran war being less severe than anticipated. Despite the improved outlook, the institute cautioned against excessive optimism, pointing to continued high gas prices, structural problems in the industrial sector, and weak private domestic demand. The institute stated that approximately 70 percent of the expected economic growth this year is attributable to a recovery in the consumption sector in Europe’s most populous country (84 million inhabitants), alongside government investments, particularly in security, defense, and infrastructure. (End) A.N.J. / T.M.A.