ifo Economic Forecast Summer 2026: Rising Energy Prices Dampen – Fiscal Policy is Driving Growth

The recovery of the German economy gained momentum during the past winter half-year. In addition to the government's highly expansionary fiscal policy, the export sector also picked up steam. For the remainder of the forecast period, it is assumed that the conflict in the Middle East will be resolved in the coming weeks and that world market prices for energy will gradually fall again in line with expectations on the futures markets. Overall, price-adjusted gross domestic product is set to increase by 0.8 percent in both the current and coming years. Compared with the escalation scenario in the ifo economic forecast from spring 2026, the growth rate for the current year has been raised by 0.2 percentage points, whilst that for the coming year remains unchanged.