The German economy will only slowly recover from more than four years of stagnation as Chancellor Friedrich Merz risks bungling his €1tn debt-funded investment drive, the country’s top economic advisory body has warned. 

In a scathing assessment of Berlin’s spending plans, the German Council of Economic Experts — which provides independent advice to the government — said that German GDP growth would edge up from 0.2 per cent this year to only 0.9 per cent in 2026, below the government’s projection of 1.3 per cent.

The five-member panel of academic economists warned that the implementation of Merz’s fiscal push, which is intended to boost defence and infrastructure, needed “significant improvement” and that under the current plans “substantial funds are replacing regular budget expenditures”.