The fall in the German Ifo in December chimes with the drop in the Composite PMI and suggests that the long-awaited recovery in the German economy still has not materialised, with the fiscal stimulus not yet having a meaningful impact. We still expect growth to pick-up from just 0.3% this year to 0.8% in 2026. But that would still be much slower than the consensus expects and way below the almost 2% y/y growth that Germany tended to achieve in the decade before the pandemic.
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