Deutsche Bank analysts forecast Germany’s fiscal policy will counter Middle East conflict headwinds, sustaining 0.5% GDP growth through mid-2026.
Germany’s GDP growth is projected to remain at 0.5% through mid-2026, supported by expansionary fiscal measures despite geopolitical risks from the Middle East conflict. Analysts highlight weakening growth momentum as a key challenge, offset by government spending and policy interventions.
The forecast follows a period of economic strain, with prior growth figures revised downward due to energy costs and supply chain disruptions. Consensus estimates had anticipated a sharper slowdown, but fiscal stimulus is expected to mitigate further deterioration.
No immediate market reaction was detailed, though the outlook suggests stability in Europe’s largest economy amid external pressures.