Germany’s Economy Minister, Katherina Reiche, emphasized the need to pivot toward emerging sectors to sustain growth, noting that traditional export-driven industries “no longer carry our growth” as they once did. Europe’s largest economy recently lowered its growth forecast for 2026 to 1.0% from 1.3%, citing global trade uncertainties and delayed effects of economic and fiscal policies. The 2027 forecast was also trimmed slightly to 1.3% from 1.4%.
Key points:
Reiche identified digitalization, artificial intelligence, new energy technologies, biotechnology, advanced materials, and defence as the main growth drivers for the future.
The government plans a two-track strategy:
- Public investment in infrastructure, climate protection, and defence.
- Reforms to attract private capital, given that public investment currently accounts for only 16% of total investment.
The central challenge is maintaining prosperity, competitiveness, and social stability in a fragmented global economy.
Implications and Analysis
Germany faces structural pressures as global growth shifts toward high-tech and green industries. Traditional manufacturing and export strengths are less sufficient to drive growth in a world dominated by innovation and digital transformation.
The emphasis on private investment signals that the government sees public funds alone as insufficient to meet the demands of technological transition and infrastructure expansion. Successfully mobilizing private capital will be key to funding research, green energy projects, and defence modernization.
If Germany fails to pivot effectively, its economic competitiveness in Europe and globally could weaken, especially as countries that lead in AI, biotechnology, and renewable energy gain market share. Conversely, a successful transition could secure long-term growth, support high-value jobs, and maintain social cohesion amid global economic uncertainty.
With information from Reuters.
