The International Monetary Fund (IMF) announced at its annual meeting in Bangkok on Tuesday that it has raised its growth forecasts for Germany. The IMF now expects German growth to reach 1.3 percent in 2026, followed by 1.1 percent in 2027. These revisions mark an increase of 0.6 percentage points for this year and 0.1 percentage points for next year, compared to the July estimate.
Overall, the IMF noted that global economic activity has proven resilient once again. Growth in the technology sector, along with buffers and adjustments, has reportedly helped mitigate the damages caused by geopolitical disruptions. Globally, the growth rate is projected to slow to 3.1 percent by 2026 before picking up to 3.4 percent in 2027. Furthermore, global overall inflation is expected to climb significantly to 4.7 percent in 2026, before dropping to 4.1 percent in 2027. The outlook is particularly challenging for energy-importing economies that fall outside of the established technological value chains.
While the adjustment margins that contributed to this resilience are not limitless, the IMF cautioned that risks are predominantly downside. Any further escalation of conflicts, a recalculation of expectations concerning artificial intelligence (AI), renewed trade disputes, or fiscal vulnerabilities could weaken growth. On a positive note, the IMF suggests that stronger momentum in AI investments, productivity gains driven by AI, or a continued easing of geopolitical and trade tensions could bolster economic growth.
