Berlin: The German federal government today lowered its economic growth forecasts for 2026 and 2027, citing continued uncertainty in global trade, the slow implementation of some structural reforms, and weak external demand.

According to Qatar News Agency, the updated government forecasts indicate that the German economy is expected to grow by approximately 1.0% in 2026, compared to a previous estimate of 1.3%. The growth forecast for 2027 was also lowered to 1.3% from 1.4%.

In its annual economic report, the government explained that the revisions reflect ongoing pressures stemming from geopolitical tensions, a slowdown in international trade, and the effects of structural transformation in the German economy, particularly in energy-intensive industrial sectors.

Conversely, forecasts indicate that a gradual economic recovery remains possible, supported by planned investment spending, improved household finances, and measures aimed at enhancing the economy's competitiveness.

These forecasts come at a time when the German economy, the largest in Europe, faces multiple challenges, including weak exports, rising production costs, disruptions to global supply chains, and slowing growth in several key markets.

The German government is seeking to address these challenges through investment packages and structural reforms designed to support growth and stimulate economic activity in the coming years.