German Government raises forecast for economic growth to 1.3% in 2026 (prev. 0.5%), 1.1% in 2027 (prev. 0.9%), and 0.6% in 2028, according to sources

A near-tripling of the German government's official growth projection for next year is a large revision by the standards of these twice-yearly forecast updates, which typically move in tenths. Revisions of this size have historically followed a change in the fiscal assumption rather than a shift in the underlying cycle, since the official forecast is built bottom-up from legislated measures; the candidates here are the defence and infrastructure spending programmes and any special-fund drawdown that feeds through with a lag. The transmission runs through the Bund curve, where a stronger nominal growth path plus heavier federal issuance has in past episodes steepened the long end and pressured swap spreads, with the euro response depending on whether the upgrade is read as Germany-specific or a euro-area fiscal signal. Worth establishing is whether the projection assumes full implementation of the announced packages or only enacted law, a distinction that has mattered in prior forecast rounds. The follow-ons are the formal presentation of the projections, the corresponding issuance calendar from the finance agency, and whether the revision feeds into the next round of European Commission and Bundesbank estimates, which set the consensus the market actually trades against.