Overview
- The IMF now sees Germany growing 1.1% in 2026 and the world at 3.3%, citing short‑term support from higher public spending and cautioning about trade conflicts and a possible AI‑investment bubble.
- A government draft obtained by Reuters reduces Germany’s 2026 GDP forecast to 1.0% and projects 1.3% for 2027, with the economic report slated for cabinet on January 28.
- Germany’s industry group BDI warns that new US tariffs threatened for February 1 would ‘significantly’ depress growth and urges faster reforms to bolster competitiveness.
- Companies are adjusting plans: Schott is prioritizing investment in Germany and currently forgoing a new US plant, while Amazon’s CEO says tariffs are starting to lift prices on some items.
- Recent indicators point to tentative momentum, with a sharp rise in the ZEW expectations index and improving order books, but business sentiment remains fragile under policy uncertainty.