Joint economic forecasters see GDP growth of 1.3% in 2026, 1.1% in 2027 and 0.4% in 2028, noting the expansion rests on a narrow foundation of high energy prices and structural problems. BNP Paribas projects 1.1% growth this year and 1.3% next, driven by exports to Europe, with domestic demand constrained by inflation around 2.7%.
Sewing framed the political backdrop as "brandgefährlich" — highly dangerous — pointing to AfD victories in Saxony-Anhalt and Mecklenburg-Vorpommern and Die Linke's win in Berlin. He said foreign investors are questioning Germany's stability and commitment to Europe, and that growth-oriented reforms from the democratic centre are the only answer to extremist gains.
Business groups have echoed the call for faster implementation of the July "Programme for Economic Recovery and Employment," a 34-point package covering tax, labour law and red-tape reduction. The Bird & Bird law firm notes the programme includes changes to fixed-term contracts, dismissal protection for high earners and workplace co-determination on AI use — areas where Sewing is now pressing for more ambition.
Whether the coalition can translate Sewing's pressure into legislative speed without fracturing its own ranks or triggering social resistance will determine if Germany's cyclical upturn becomes a structural recovery.
Sources: Source 1 · Source 2 · Source 3 · Source 4 · Source 5 · Source 6
