Like an airliner cleared for departure, the German economy is on the runway with engines running and should soon lift off. The order intake has recently been extraordinarily high. Sentiment indicators are pointing upwards again as well. We therefore maintain our forecast of 1.5% GDP growth for 2026 and 1.8% for 2027. The euro area will also benefit from the approaching upswing in Germany. Against this background, services inflation is easing only very gradually and keeping inflation at slightly above two per cent in Germany and just a tad lower across the euro area.

KfW Business Cycle Compass February 2026(PDF, 263 KB, accessible)

Press release