In brief

• The Bundesbank expects German economic growth to pick up in the fourth quarter of 2026.
• Germany's Council of Economic Experts forecasts GDP growth of 1.3 percent in 2026 and 1.0 percent in 2027.
• The recovery is driven by exports, government spending and a rebound in industry, while experts warn of a strain on the budget.

A faster rebound than in the summer

Joachim Nagel, president of the Bundesbank, said at a conference in Riga that the pace of German economic growth will accelerate as early as the fourth quarter. The central bank's preliminary assessments show a stronger recovery than assumed in the summer (German growth stronger than expected, seen picking up: Bundesbank chief – Investing.com). According to Nagel, the German economy is returning to growth faster than forecast, although it still faces structural difficulties.

Three years of stagnation

Germany, the world's third-largest economy, stood still for most of the last three years. The recovery began this year. An additional boost came from a sharp increase in government spending on defence and infrastructure.

Forecasts revised upward

In June the Bundesbank projected GDP growth of 0.5 percent for 2026. The German Council of Economic Experts, which advises the government, in its report published on 11 November now forecasts growth of 1.3 percent for 2026 and 1.0 percent for 2027 (Niemcy przyspieszają. PKB wzrośnie – Deutsche Welle). Experts note that this is the first clear increase since 2022.

What is driving the recovery

According to the council, this is primarily due to exports and state consumption spending, despite high energy prices. The rebound in manufacturing, especially chemicals, however, was the most surprising.

A warning for the budget

Experts warn against excessively burdening the state budget. In their view, the good economic climate changes little about the problems of public finances.

Significance for Polish companies

For Polish firms selling components and services to German manufacturers, this is a signal that demand from the EU's most important trading partner may grow faster than expected in the spring.