German Economic Institutes Raise 2026 Growth Forecast to 1.3% From 0.6%

BERLIN, Sept 24 (Reuters) — Germany's five leading economic institutes raised their 2026 GDP growth forecast to 1.3% from a prior 0.6%, citing a stronger-than-expected first half, and lifted their 2027 projection to 1.1% from 0.9%. The institutes expect growth to slow to 0.4% in 2028 as structural factors bite. They forecast inflation rising to 2.8% in 2026 and 3.2% in 2027 before easing to 2.0% in 2028. "The recovery rests on a narrow foundation, as high energy prices and structural problems continue to weigh on economic activity," said Oliver Holtemoeller of the Halle Institute for Economic Research (IWH). The unemployment rate is projected to fall from 6.4% in 2026 to 6.2% in 2027 and 5.8% in 2028, though employment is expected to decline further for now. The forecasts are jointly produced by RWI, Ifo, IfW, IWH and DIW.