German authorities lower their 2026 economic growth forecast for Germany

Berlin, November 12th (Xinhua) - The German Economic Expert Committee lowered its forecast for the growth of Germany's Gross Domestic Product (GDP) in 2026 in its latest annual report released on the 12th.

The report predicts that the German economy will not show a significant recovery in 2026, with a growth rate of only 0.9%, slightly lower than the spring forecast of 1.0%. The federal government had previously projected an economic growth rate of 1.3% for next year.

Experts point out that the reasons for the sustained economic weakness include external pressures brought about by changes in the global landscape, domestic economic and security structural adjustments, declining industrial competitiveness, and population aging.

The report suggests that although the federal government has addressed challenges by increasing investment and boosting defense spending, there is still significant room for improvement in investment execution. If not implemented effectively, it may weaken growth potential and jeopardize the sustainability of public finances.

The expert committee calls for the government to use the Special Fund for Infrastructure and Climate Neutrality (SVIK) more efficiently. If this total of 500 billion euros can truly be used as additional investment beyond the regular budget, it will significantly promote economic development. But this has not yet been achieved in the current budget planning.

Most experts also suggest reforming inheritance and gift taxes, including imposing higher tax rates on corporate assets. However, committee member Veronica Grim believes that in the current context of weak private investment willingness, discussing increasing corporate inheritance tax "appears reckless".

The German Council of Economic Experts is one of the most important think tanks of the federal government, composed of five economists recommended by the government and appointed by the president, also known as the "Five Wise Men" Committee. They regularly release economic reports to provide reference for the German government in formulating economic policies.