Debt and more working days drive growth 

The German economy grew by 0.3 % in the fourth quarter of 2025. Private and government consumption expenditure in particular contributed to this expansion. In 2026, in addition to special funds for infrastructure and defence, the higher number of working days will also have a positive impact on growth. The approximately 2.4 additional working days compared to the previous year alone are expected to generate around 0.3 percentage points of additional growth.

Little movement on the labour market 

The number of employees subject to social insurance contributions recently stood at 34.954 million, slightly lower than in the same month last year. While employment in the manufacturing sector declined, the healthcare and public administration sectors saw an increase in staff. The labour market is showing little momentum. Although the risk of becoming unemployed due to job loss is low, the chance of ending unemployment by finding a job is historically low.

Monetary policy and price trends ensure stability 

Only minor changes in monetary policy are expected in the eurozone in 2026. No adjustments to the deposit facility are currently anticipated. The inflation rate is likely to approach the ECB's 2 % target. In addition to declining producer prices, the appreciation of the euro against the US dollar is also limiting the risks of a renewed rise in inflation.

Companies remain sceptical 

Although fiscal stimulus measures are planned for 2026, companies remain cautious. Sentiment indicators remain subdued and do not yet point to a broad economic recovery. At the same time, the combination of stable macroeconomic conditions and foreseeable government stimulus measures provides a solid foundation for a gradual improvement in sentiment over the course of the year.

Key figures at a glance

As of February 2026. Sources: Julius Baer Research, Federal Employment Agency, Federal Statistical Office (Destatis)