Rare good news for Merz as Germany’s growth outlook jumps

FRANKFURT ― Germany’s leading economic institutes have significantly raised their growth forecasts for Europe’s largest economy, providing an unexpected bit of good news for embattled Chancellor Friedrich Merz. The institutes now expect GDP to grow 1.3% in 2026, up 0.7 percentage points from their spring forecast, and 1.1% in 2027, up 0.2 points. Growth is forecast to slow to 0.4% in 2028 due partly to demographic challenges . The immediate numbers provide some short-term relief for Merz, who has come under mounting political pressure for failing to deliver a much-needed economic turnaround in Germany — an issue the surging Alternative for Germany (AfD), the far-right party now leading national polls , has seized on.