Germany’S RWI Forecasts 0.8% Economic Growth in 2026 and 2027

Germany’s RWI economic institute said it expected the German economy to grow 0.8% in both 2026 and 2027, with stronger industrial activity only partly offsetting the drag from higher energy prices linked to the war in Iran. According to Jin10, RWI said it had lowered its expectations for the recovery because rising oil, fuel, and transport costs were increasingly feeding through to the broader economy. RWI forecast consumer price inflation of 3.1% in 2026 and 2.9% in 2027. RWI chief economist Torsten Schmidt said the current surge in inflation was not limited to fuel and energy, adding that higher costs were increasingly being passed along the value chain and would show up in a growing range of goods and services. RWI said private consumption could remain weak as persistent inflation eroded household purchasing power, and it expected the economy to stagnate in the second quarter of 2026. At the same time, RWI said German industry had performed better than expected so far, with output, orders, and exports all rising in the first quarter. It said industry could still benefit from export growth and increased public investment, though high energy costs were expected to weigh over time.