“The global economy is expected to demonstrate resilience in 2026 with growth of 3.3%, driven by a solid US economy. Momentum in China and the Eurozone is likely to ease slightly – Trump’s second term and the new era of US foreign policy are likely to cause further geopolitical and trade policy uncertainties, but markets are calm – Policy rates in the US and the Eurozone are likely to have reached their neutral level and to remain unchanged for the time being German Economy – The German economy is likely to recover strongly in 2026, growing by up to 1.5%, primarily driven by strong domestic demand – Fiscal stimulus appears set to strengthen markedly, providing a substantial boost to growth – A recovery in German net exports is less probable, however Structural Challenges – Demographic change and declining immigration figures look set to dampen potential growth, which could fall from 0.3% to 0.1% in the medium term without supply-side reforms – A recent increase in bureaucratic hurdles is placing additional strain on companies – Germany’s competitiveness has consistently deteriorated since 2022.”
Morten W. Langer
