Germany Sees Economy Reviving With Government-Spending Boost

The German government expects Europe’s biggest economy to emerge from three years of stagnation in 2026, but a heavy reliance on state spending shows fostering a broader-based recovery remains a work in progress.

Gross domestic product is seen expanding by 1% this year and by 1.3% in 2027, according to an updated outlook published Wednesday by the economy ministry in Berlin. The predictions are broadly in line with other institutions like the International Monetary Fund, while marking a slight downgrade from October forecasts of 1.3% and 1.4% respectively.