Berenberg Sees a Gradual GDP Rebound For Germany This Year and 2027

11:53 AM EST, 01/15/2026 (MT Newswires) -- After two years of a mild recession, the German economy returned to modest growth in 2025, said Berenberg after Thursday's gross domestic product data.

Helped by a 1.4% rise in private and a 1.5% increase in public consumption, calendar-adjusted GDP edged up by 0.3% last year, noted the bank. Berenberg pointed out that the annual result and the first official guesstimate for Q4, up 0.2% quarter over quarter, confirm its forecasts.

Due to the fiscal stimulus, some pro-growth reforms and the ongoing adjustment to external challenges, the bank expects the German economy to continue its gradual rebound in a fashion that looks like a ladder: after contractions in GDP of 0.7% in 2023 and 0.5% in 2024 and the small 0.3% rise in 2025, Berenberg projects calendar-adjusted growth of 0.7% for this year and a cyclical peak in growth of 1.3% for 2027.

More government spending will likely account directly for about 0.4 percentage points (ppt) of the 0.7% rise in German GDP, which the bank predicts for 2026. A rebound in residential construction due to low interest rates, faster approval procedures and a worsening shortage of housing will add to that.

Some increase in private consumption and business investment should also help to more than offset the likely drag from net exports, which could still subtract 0.4% from German GDP this year.

Berenberg's call for 0.7% growth this year is below the 1.0% Bloomberg consensus. In the bank's view, some other pundits may be overestimating the speed at which the German stimulus, which is starting to show up strongly in orders, will actually raise output. Some companies will struggle to fill all the new orders for tanks and drones and to upgrade more railway tracks than before.

Unlike Berenberg, some other observers may also include the positive calendar effect from a higher number of working days of up to 0.3 ppt for this year in their GDP forecasts. After growth roughly in line with the long-term trend in 2026, the bank sees Germany reaching a cyclical peak of 1.3% growth in 2027, when the stimulus reaches full force and consumers and businesses react to the more positive environment by also spending more.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.