By Maria Martinez
BERLIN, Jan 28 (Reuters) – Investments are boosting growth in Europe’s biggest economy but their implementation needs to be faster, German Finance Minister Lars Klingbeil said on Wednesday, citing the government’s 2026 economic report.
The German government is lowering its growth forecast for gross domestic product (GDP) in 2026 to 1.0% from 1.3%, according to a person familiar with the projections.
Even so, the forecast mark an acceleration after two years of stagnation and only modest growth last year.
“The focus on investment is the right one,” Klingbeil said. “When it comes to implementation, we must further increase the pace.”
Growth is expected to be driven mainly by a fiscal package approved in March 2025. But by the end of the year only 24 billion euros ($28.76 billion) of the 500 billion-euro infrastructure fund had been invested, underscoring the slow pace of decision-making in Germany’s federal system.
Economists and business groups say many promised reforms needed for sustainable growth are still not in place.
“What matters to me are reforms that make our country faster and more efficient, unlock potential, and remove bureaucratic hurdles” Klingbeil said, without giving further details on what changes the government plans next.
($1 = 0.8346 euros)
(Reporting by Maria MartinezEditing by Madeline Chambers)
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