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Germany shows resilience, but Commerzbank expects only modest 2026 growth

Commerzbank projects German GDP growth of 1.2% for 2026, citing weak corporate investment and exports even as leading indicators improved.

Reported · Written up by our desk · Central Banks

FXStreet highlights Commerzbank Chief Economist Dr. Jörg Krämer’s view that German leading indicators have offered upside surprises, pointing to resilience despite high energy prices and the Iran War.

Krämer said the Ifo business climate index rose from 88.8 to 89.9, alongside firmer readings from purchasing managers’ indexes and other measures like incoming orders.

Still, Commerzbank expects only a moderate recovery, forecasting German GDP growth of 1.2% in 2026. The outlook is constrained by declining corporate investment since early 2024 and weak export performance, including softness in exports to China and the impact of Trump’s tariffs.

The recovery, according to Commerzbank, would depend more than usual on higher government spending on consumption and investment, including defense, rather than a self-sustaining private-sector upswing.

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