Is the Sick Man of Europe on the Road to Recovery?
Oliver Rakau, Deputy Chief Eurozone Economist Oxford Economics
Language: German
The pandemic, the energy crisis, China’s rise and US tariffs have kept the German economy in a state of stagnation in recent years and, for the most part, represent structural challenges. The war in Iran has further prolonged this period of weakness in 2026.
However, the sharp increase in defence spending and infrastructure investment is expected to provide growing momentum to the economy from 2027 onwards and encourage additional private investment. This will create greater growth opportunities for industry, logistics and the real estate sector.
Without further reforms by the government and more substantial efforts by businesses to adapt to the new global environment, however, the growth trajectory is likely to flatten again quickly.
