Economic policy reboot brings confidence
The change of government and the special fund decided shortly thereafter have led to a noticeable improvement in sentiment. Both companies and consumers are once again more optimistic about the coming months. The extent to which the additional government investment will also increase production potential and thus long-term growth remains to be seen. However, one thing is clear: the package of measures should be sufficient to provide a short-term economic boost.
Cautious development on the labour market – revival expected in 2026
Despite initial signs of recovery, the labour market remains weak at present. The unemployment rate stood at 6.2 % in May 2025, above the previous year’s figure. The number of job vacancies is also declining. However, with the expected economic upturn from 2026 onwards job creation is also likely to pick up speed again
ECB reaches its target
In June, the European Central Bank lowered its deposit rate again, to 2.0 %. A further interest rate cut in the course of the year appears possible, as inflationary pressure is easing. The monetary policy target corridor has thus almost been reached. However, the yield curve has normalised, as long-term interest rates and mortgage terms have hardly reacted so far. There has been no major boost to the real estate market to date, although residential property prices have risen slightly again recently.
Outlook for 2026: Opportunities with significant risks
The recovery expected for 2026 is subject to global trade policy. The unclear prospects in the negotiations with the US on possible tariff increases pose a significant risk. If no agreement is reached, there is a risk of a noticeable decline in GDP growth, especially for export-dependent industries. This increases uncertainty for companies and makes investment decisions more difficult. An early clarification of transatlantic trade would be of central importance for economic stabilisation.