The German government has lowered its 2026 growth forecast to one percent, conceding that efforts to kickstart Europe's beleaguered top economy with vast public spending were moving slower than hoped.
The estimate was down from a previous official forecast of 1.3 percent GDP growth made in October, and comes as Chancellor Friedrich Merz faces mounting criticism over his stalling efforts to revive the export-driven economy.
While the performance is set to be better than in recent years — output was weak in 2025 after two years of recession — the prediction may still disappoint officials in Berlin who had hoped for a stronger turnaround.
"The expected stimulus from economic and fiscal policy measures did not materialise quite as quickly or to the extent that we had assumed," Economy Minister Katherina Reiche told a press conference.
She noted however that recent data suggested "we are now seeing a significant recovery."
The German economy has been hit hard by a manufacturing slump, high energy prices, weak demand in major export markets like China, fierce international competition and US President Donald Trump's tariff blitz.
Merz, who took power last year, eased Germany's strict debt rules to pave the way for spending of hundreds of billions of euros on defence and infrastructure, but critics say the outlays have been slow to filter through to the wider economy.
