German GDP Up 0.3 Percent, State Deficit at 71.3 Billion
Germany's statistics office revised second-quarter growth up to 0.3 percent, driven by exports while equipment investment fell 1.4 percent.
AI-generated illustration: container cranes and a cargo barge in an inland port at first morning light.
Germany's economy grew 0.3 percent in the second quarter of 2026, a tenth of a point more than first reported, while the public sector ran a deficit of 71.3 billion euros over the first half of the year.
At a glance
- Q2 2026 GDP: +0.3 percent quarter on quarter, revised up from an initial 0.2 percent.
- Exports +2.0 percent, imports +1.5 percent versus the first quarter of 2026.
- Equipment investment -1.4 percent, construction +0.1 percent, private and public consumption +0.1 percent each.
- Public deficit, first half of 2026: 71.3 billion euros, up 36.6 billion from a year earlier.
- Federal government accounts for 48.1 billion euros (+29.0 billion); social insurance funds 1.8 billion in deficit.
Germany's economy expanded more than statisticians first calculated. The Federal Statistical Office, known as Destatis, now puts second-quarter growth at 0.3 percent against the previous quarter, up from an initial reading of 0.2 percent. That marks a third consecutive quarter of expansion. The same release shows a public-sector deficit of 71.3 billion euros for the first six months of the year.
Trade Carried the Quarter
Foreign trade again did the heavy lifting. Exports rose 2.0 percent from the first quarter and imports 1.5 percent. Destatis president Ruth Brand attributed the increase mainly to strong export performance, as she had for the preceding quarter.
Domestic demand looked weaker. Investment in equipment, a category covering machinery, devices and vehicles, dropped 1.4 percent. Construction investment edged up 0.1 percent, matched by private and government consumption at 0.1 percent each. The quarter's gain therefore rests on a narrow foundation.
A 71.3 Billion Euro Half-Year Gap
The public accounts moved the other way. The combined deficit reached 71.3 billion euros in the first half of 2026, some 36.6 billion euros wider than in the same period of 2025. The federal government alone accounted for 48.1 billion euros, an increase of 29.0 billion. Social insurance funds ended the half-year 1.8 billion euros in the red.
Measured against economic output, that half-year shortfall equals 3.1 percent, above the 3 percent reference value in the European Union's Stability and Growth Pact. One caveat matters here: the pact's reference value applies to a full calendar year, not to six months. Both sources used for this report describe 3.1 percent explicitly as a half-year figure, so the annual outcome for 2026 is not settled by these numbers.
What Forecasters Expect for 2026
Full-year projections have been moving higher. State development bank KfW lifted its forecast by 0.4 percentage points to 1.1 percent, and the IMK institute expects at least 1.1 percent. The wider consensus among economists sits near 1.0 percent.
For context, output grew 0.2 percent in 2025 after contracting in each of the two preceding years. Whether the government's multibillion-euro investment program is actually powering the recovery cannot be read off these quarterly figures. The one line item that would speak to it directly, equipment investment, fell.
FAQ
How much did the German economy grow in Q2 2026?
It grew 0.3 percent against the first quarter. Destatis revised its initial 0.2 percent estimate up by a tenth of a percentage point. It was the third straight quarter of growth.
How large is Germany's budget deficit in 2026?
The public-sector deficit reached 71.3 billion euros in the first half of 2026, 36.6 billion more than a year earlier. That equals 3.1 percent of output for those six months. A full-year figure is not yet available.
Is exports or investment driving German growth?
Exports. Foreign sales rose 2.0 percent quarter on quarter, while equipment investment declined 1.4 percent. Construction and consumption each added 0.1 percent.
