German Economic Outlook: 1.1% Growth in 2026

The German economy is forecast to grow 1.1% this year, ending six years of stagnation, as changes in government fiscal policy increase domestic demand, according to Goldman Sachs Research. Manufacturing, which has been a drag on German growth, shows signs that it has stabilized even as the sector still faces significant headwinds. “About half of this year’s growth should come from expansionary fiscal policy that we expect to boost domestic demand significantly,” Goldman Sachs Research economist Niklas Garnadt writes in the team’s report. The drag on growth from US tariffs should recede, but the team expects ... (