Germany’s leading economic research institutes have raised their 2026 growth forecasts, reinforcing expectations that Europe’s largest economy is emerging from a prolonged stagnation. The Ifo Institute for Economic Research lifted its projection to 1.4% from 0.8%, while the Kiel Institute for the World Economy, or IfW, raised its forecast to 1.3% from 0.8%. Ifo expects growth of 1.2% in 2027 and 0.8% in 2028; IfW projects 1.0% in 2027 and 0.5% in 2028. The institutes cited expanded fiscal spending, improving manufacturing orders, recovering export demand and stronger business sentiment. Ifo estimates infrastructure, climate-neutrality and defense spending will provide about €40 billion, or 0.8% of GDP, in fiscal stimulus in 2026. Both warned that the recovery remains vulnerable to higher energy prices, geopolitical risks, weak private investment and Germany’s deteriorating export competitiveness. Ifo expects inflation to rise to 2.8% in 2026 and 3.0% in 2027 before easing to 2.3% in 2028. DIW Berlin had separately raised its 2026 forecast to 1.2% from 0.5%, while warning that Germany’s recovery remained fragile.