The organizers of the Hanover Fair (Lower Saxony), the world’s largest industry fair, which ends on Friday April 24, had undoubtedly hoped for a better context. Because confidence in the German economy continues to deteriorate. The Minister of the Economy and Energy, Katherina Reiche, confirmed on Wednesday what the economic institutes had announced at the beginning of April: the clear recovery expected for 2026 will ultimately not take place.
Berlin now expects growth of only 0.5% for the current year, half as much as anticipated in January. The war in Iran, which has raised energy prices, has swept away the hopes of an end to the crisis which had accompanied the formation of Friedrich Merz’s government in the spring of 2025, particularly in business circles.
In 2026, the only real support for growth will come from public spending, in addition to a positive calendar effect, warned the Ministry of the Economy when presenting the new forecasts. In the spring of 2025, Berlin initiated a paradigm shift in public spending, by widely opening the credit floodgates to finance defense spending and infrastructure renovation. This recovery effort of 1,000 billion euros over ten years, the largest ever made since reunification in 1990, is starting to bear fruit, but timidly.
You have 74.76% of this article left to read. The rest is reserved for subscribers.
Originally published at Almouwatin.com
