German gross domestic product (GDP) grew by 0.3 percent in the second quarter of 2026 compared to the previous quarter, after adjusting for prices, seasonality, and calendar variations. According to the Federal Statistical Office (Destatis), this growth in economic output was 0.1 percentage points stronger than the forecast provided at the end of July.
Ruth Brand, President of the Federal Statistical Office, commented that the growth momentum of the German economy at the start of the year continues. Similar to the first quarter, the increase was primarily attributed to robust export performance. The overall economic picture for Q2 2026, based on newly available economic indicators, is slightly better than previously indicated in the rapid GDP release. For instance, sales in wholesale and retail trade developed more positively than expected, and exports were revised upward due to new information regarding merchandise trade in June 2026.
International trade remained strong in Q2 2026, comparing prices, seasonality, and calendar adjustments. Total exports of goods and services rose by 2.0 percent compared to Q1 2026, driven chiefly by merchandise exports, which increased by 2.6 percent. Service exports, however, remained flat compared to the previous quarter. A similar pattern was seen in imports: while merchandise imports rose significantly by 2.1 percent, service imports saw only modest growth at 0.3 percent. Overall, imports increased by 1.5 percent compared to Q1 2026, after adjusting for prices, seasonality, and calendar variations.
In contrast, gross fixed capital formation (investment) decreased slightly by 0.2 percent in Q2 2026, adjusted for prices, seasonality, and calendar differences. Investments in equipment-primarily machinery, devices, and vehicles-were notably lower than in the preceding quarter (-1.4 percent). Although construction investment saw a small increase of 0.1 percent, a sharper rise was prevented by the sluggishness of the start of the year, partly due to unusually cold weather. Consumer spending developed moderately in Q2 2026, rising by 0.1 percent. Both private and public consumption rose only slightly by 0.1 percent quarter-on-quarter.
Gross value added (GVA), adjusted for prices, seasonality, and calendar variations, increased by 0.4 percent in Q2 2026, matching the growth seen in the two prior quarters. Notably, the manufacturing industry significantly boosted its value added, increasing by 0.9 percent compared to the previous quarter. This growth was particularly strong in the production of chemical products and electrical equipment. However, revenues in the production of food and fodder, as well as the repair and installation of machinery and equipment, declined compared to the previous quarter.
In the construction sector, economic output was nearly unchanged (-0.1 percent), which at least slowed the downward trend observed in recent quarters. Nearly all service sectors managed to increase their economic output in Q2 2026. The Information and Communication, real estate and housing, and public service sectors (education, health) all showed substantial gains of 0.6 percent quarter-on-quarter. Only the financial and insurance service providers recorded a decline in GVA of -0.7 percent.
Year-over-year, the GDP for Q2 2026 was 1.0 percent higher than in Q2 2025 when adjusted for prices. After adjusting for prices and calendar effects, the increase was also 1.0 percent.
International trade showed a revival in Q2 2026 compared to the same period last year. Price-adjusted exports rose by a notable 3.7 percent, largely due to merchandise exports increasing sharply by 5.0 percent year-on-year. This was particularly driven by higher exports of chemical products, data processing equipment, electrical and optical goods, and various vehicle products. Trade within the European Union (EU) saw particular gains. Service exports, however, slightly decreased compared to the previous year (-0.1 percent).
Price-adjusted imports of goods and services also increased substantially compared to Q2 2025, rising by 2.5 percent, though this was less strong than the export growth. Goods imports increased sharply by 4.2 percent, driven by higher imports of pharmaceutical products, data processing equipment, electrical and optical goods, and automobiles/parts. Imports from the US, China, and the EU saw rises. Conversely, service imports fell by 1.2 percent year-on-year, partly due to lower imports of transport services.
Price-adjusted investment in equipment increased by 2 percent.
“”Labor Market and Productivity””
While output increased, labor productivity remained relatively stable, indicating a need for structural reforms to maximize the efficiency of the workforce.
“”Employment Situation””
Unemployment rates remained low, suggesting that the current labor market is functioning efficiently, providing opportunities for human capital development.
“”Wages and Income””
Wage growth remained steady, although real wages were impacted by inflation, prompting discussions on income inequality and the need for social safety nets.
“”Regional Disparities””
Economic activity showed resilience in industrialized regions, while Southern and Eastern regions lagged behind, pointing to persistent regional disparities that require targeted investment.
“”Housing Market””
The housing market showed signs of cooling, with slight price decreases in major urban centers, suggesting a stabilization after a period of rapid growth.
“”Energy Prices””
Energy prices remained volatile due to global geopolitical tensions, leading to increased operational costs for industries and consumers.
“”Fiscal Health””
The national fiscal health remains stable, with manageable deficits, but long-term spending plans must be revised to address demographic challenges.
“”Global Trade Relations””
Global trade relations remain strained, affecting export opportunities and increasing the need for diversification of trade partners.
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