Ifo institute slashes German economic growth forecasts in latest outlook update

Ifo institute slashes German economic growth forecasts in latest outlook update

The Ifo institute now expects the German economy to only expand marginally by 0.2% this year, revised lower from their previous projection of 0.3%. Meanwhile, they see the economy expanding by 1.3% in 2026 but that is also lower than their previous estimate from the summer of 1.5%. For 2027, Ifo forecasts the German economy to grow by 1.6%.

Of note, the institute says that US tariffs are continuing to pose significant headwinds for Germany and that "if economic policy remains at a standstill, there will be further years of economic paralysis and erosion of German business prospects".