By DPA | TIN24 Editor: Amit Alhat
Berlin, 12 November 2025, 15:46 CET
The German Council of Economic Experts has lowered its 2026 growth forecast, expecting gross domestic product to expand by 0.9%, according to its annual report released on Wednesday.
Earlier this year, the council had projected a 1% increase, while the federal government continues to anticipate a 1.3% rise. The council, widely known as the “Five Sages,” warned that Germany’s multibillion-euro special fund for infrastructure and climate initiatives will likely have only a limited impact on economic output.
In the report, the experts noted that much of the fund has so far been directed toward budget reallocations and consumption-related spending, such as the extension of maternity pensions. “The effect would be significantly greater if the funds were used entirely for additional expenditure and investment,” the report stated.
For 2025, the council slightly improved its forecast to 0.2% growth, revising its previous estimate of zero expansion.
Business associations continue to cite enduring structural challenges as key drags on growth, including high energy costs, increasing social security burdens, and a complex regulatory environment.
On fiscal reform, most council members—except Veronika Grimm—support revising inheritance tax rules, arguing that current regulations unequally affect different types of assets, with business holdings benefiting most under existing exemptions.
Author: The India News 24
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