The German Institute for Economic Research released its fall economic forecast on September 20, drastically raising Germany's economic growth forecast for 2026 to 1.2% from 0.4% previously. The Institute said that the upward forecast was mainly due to unexpectedly strong economic growth in the first half of this year. However, the German Institute for Economic Research predicts that “growth will slow again in the second half of 2026.” The reason is that special export preferences will expire, high energy prices will curb private consumption, and the construction crisis, mainly driven by government investment, will continue. The research estimates that the German economy will grow by slightly less than 1% in 2027. At the same time, the agency warned that factors such as the Russian-Ukrainian conflict, the situation in the Middle East, international trade conflicts, and falling water levels in major European rivers could all have a negative impact on the German economy. Furthermore, due to factors such as rising energy prices, the German Economic Research Institute predicts that in 2026, Germany's inflation rate will be slightly higher than 2.5%, while consumption is expected to grow by only 0.3%.

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