Earlier this year, the council forecast growth of 1% for 2026, while the government has projected GDP to rise 1.3%.

The five-member council, known as the “Five Sages,” said the German government’s multibillion-euro special fund for infrastructure and climate initiatives is likely to only have a modest effect on GDP.

So far, the fund has been largely used for budget reallocations and consumption-oriented spending, such as the expansion of maternity pensions, it noted.

“The effect would be significantly greater if the funds were used entirely for additional expenditure and investment,” the economists conclude.

For 2025, the experts have raised their growth forecast slightly to 0.2%, up from their previous expectation of stagnation.

Business associations point to structural problems as the main reason for Germany’s economic woes, including high energy prices compared to other countries, rising social security contributions and complex bureaucracy.

Most members of the Council of Economic Experts – with the exception of Veronika Grimm – advocate a reform of inheritance tax, arguing that it applies unevenly to various types of assets. They note that business assets in particular benefit heavily when it comes to taxation.