Will the Federal Republic of Germany announce that it is in an economic recession by the end of 2026?
Jeremy Lichtman’s Multi-AI Oracle predicts today: 20%
10–13 minutes read
Obtaining outside data.
Checking internet sources, using keywords: Germany economic recession 2026
News from various sources:
The extracted content primarily focuses on Germany’s economic outlook leading up to and including 2026, with specific emphasis on planned reforms and government actions to boost economic growth. Key takeaways from the text include:
1. **Economic Growth Projections**:
– Germany is expected to see slight economic growth, with GDP projected to rise by 0.2% in 2025 after two years of contraction. The growth rate is expected to improve to 1.3% in 2026 and 1.4% in 2027, according to the leading research institutes’ forecasts.
2. **Need for Reforms**:
– The anticipated rebound is largely attributed to rapid fiscal expansion. However, this boost is expected to be temporary unless Germany addresses underlying structural issues.
3. **Energy Cost Reduction Plan**:
– From January 2026, Germany plans to implement a scheme to lower industrial electricity costs, particularly benefiting power-intensive industries like chemicals and steel manufacturing. This move aims to maintain competitiveness against global producers, particularly from Asia.
– The plan involves setting a subsidized energy price and could cost up to €4.5 billion over three years, pending exemption from EU state aid laws. This includes obliging firms to invest in reducing greenhouse gas emissions.
4. **Government Economic Outlook**:
– The government plans to revise its economic forecasts, aligning them with research institutes’ projections. The forthcoming autumn projections, led by Economy Minister Katherina Reiche, are expected to confirm a 0.2% growth rate for 2025, which marks a revision from earlier predictions of no growth.
These summarized insights highlight Germany’s efforts to stabilize and grow its economy through fiscal measures and structural reforms, with specific initiatives targeting energy cost reduction to support industrial sectors critical to its economic engine.
Fact-checking news summary:
Let’s evaluate the facts from the summary:
1. **Fact:** Germany is expected to see slight economic growth, with GDP projected to rise by 0.2% in 2025 after two years of contraction. The growth rate is expected to improve to 1.3% in 2026 and 1.4% in 2027, according to the leading research institutes’ forecasts.
– **Check:** True (Assuming this matches available economic forecasts, but external verification needed)
– **Importance:** Important (Growth projections are key to determining whether there will be a recession)
– **Relevance:** True (Directly relevant to the question about a potential recession)
2. **Fact:** The anticipated rebound is largely attributed to rapid fiscal expansion. However, this boost is expected to be temporary unless Germany addresses underlying structural issues.
– **Check:** True (A logical assessment of fiscal policy impact, but dependent on specific policy details)
– **Importance:** Important (Sustainability of growth impacts recession risk)
– **Relevance:** True (Relevant for understanding long-term economic stability)
3. **Fact:** From January 2026, Germany plans to implement a scheme to lower industrial electricity costs, particularly benefiting power-intensive industries like chemicals and steel manufacturing.
– **Check:** True (Assuming this matches governmental policy announcements, but external verification needed)
– **Importance:** Important (Supports industrial competitiveness, impacting overall economic health)
– **Relevance:** True (Affects economic conditions)
4. **Fact:** The plan involves setting a subsidized energy price and could cost up to €4.5 billion over three years, pending exemption from EU state aid laws. This includes obliging firms to invest in reducing greenhouse gas emissions.
– **Check:** True (Details depend on actual policy implementation, but logically consistent)
– **Importance:** Important (Subsidies affect fiscal health and economic policies)
– **Relevance:** True (Impacts industry’s cost structure and competitiveness)
5. **Fact:** The government plans to revise its economic forecasts, aligning them with research institutes’ projections.
– **Check:** True (Governments regularly update forecasts based on new data)
– **Importance:** Lesser Importance (Forecast revision itself doesn’t directly prevent a recession but indicates transparency and adjustment strategies)
– **Relevance:** True (Ensures policy and expectations are based on current assessments)
6. **Fact:** The forthcoming autumn projections, led by Economy Minister Katherina Reiche, are expected to confirm a 0.2% growth rate for 2025, which marks a revision from earlier predictions of no growth.
– **Check:** True (Assuming accuracy in reporting future projections)
– **Importance:** Important (Confirms an item of potential economic improvement)
– **Relevance:** True (Directly impacts recession considerations)
All the facts in the summary are relevant to the question. The projections of economic growth are directly related to addressing whether Germany will enter a recession, while structural reforms and plans to reduce energy costs are critical to ensuring sustainable growth and competitiveness, factors that will ultimately affect the country’s economic status by the end of 2026.
Fact-checked summary:
Germany is anticipated to experience moderate economic growth, with GDP expected to increase by 0.2% in 2025 following two years of decline, and further improve to 1.3% in 2026, according to leading research institutes’ forecasts. This growth is significantly attributed to a temporary fiscal expansion; however, addressing underlying structural issues is necessary for sustaining long-term growth. In January 2026, Germany plans to implement a scheme to reduce industrial electricity costs, benefiting energy-intensive sectors such as chemicals and steel. The planned subsidized energy price aims to enhance industrial competitiveness, potentially costing up to €4.5 billion over three years and requiring firms to invest in reducing greenhouse gas emissions. Additionally, the government intends to adjust its economic forecasts to align with these projections, suggesting an emphasis on transparency and updated strategies.
These measures collectively influence Germany’s economic conditions
and competitiveness, playing a critical role in determining the likelihood of a recession by the end of 2026.
OpenAI gives a base rate of 20%
The question difficulty is rated 6 (0 to 10)
Historical weighted factors include:
0.3, Historical frequency of recessions in Germany during economic slowdowns
0.3, Effectiveness of previous fiscal policies and interventions
0.4, Performance of GDP growth and other economic indicators in similar scenarios
A Bayesian calculation could be performed as follows:
Using historical factors, we calculate the base likelihood of recession as 20%, applying weights to each factor. Incorporating recent economic policies and current forecasts, the potential for moderate growth and fiscal intervention slightly reduces the risk, adjusting the probability to 15%.
Bayesian base rate: 15%
Sufficient news to provide a good forecast? 1 (0 or 1)
News is relevant, topical and unbiased? 1 (0 or 1)
Question classification: case_based_decision_theory
Expected time (days) until question close: 42
The following were considered in order to produce this base rate:
The base rate is derived from historical analysis of Germany’s economic cycles and governmental effectiveness. The projected 1.3% GDP growth in 2026 and proactive fiscal measures suggest that recession likelihood is reduced compared to typical downturn periods.
Ideally, the news feed would contain the following sorts of information for a better forecast:
Further information on consumer confidence levels, private sector investment trends, and international trade dynamics would enhance the forecast. Insights into the adaptability of industries to government initiatives would also be beneficial.
Some potential divergent considerations that might affect the base rate:
Unanticipated geopolitical or macroeconomic shocks could lead to worse-than-expected economic conditions. Additionally, if global demand significantly weakens or the energy subsidy fails to stimulate industrial growth, the probability of recession could increase.
The following chain of events are necessary for the question to resolve positively:
– Germany experiences a decline in GDP in the remaining months of 2025 and throughout 2026. (Unlikely)
– The temporary fiscal expansion does not lead to sustained economic momentum. (Possible)
– Structural issues preventing long-term growth are not adequately addressed. (Possible)
– The energy subsidy scheme and investments in greenhouse gas emissions reduction fail to enhance industrial competitiveness sufficiently. (Possible)
– External factors, such as geopolitical tensions or other macroeconomic shocks, negatively impact Germany’s economy. (Unlikely)
Querying Claude (Error: Claude is not returning an array)
Querying Mistral (AI predicts: 0.15 – confidence: 5)
Querying OpenAI (AI predicts: 0.25 – confidence: 6)
Question Type: Binary
Median from LLMs: 0.2
Base rate: 0.2 (from OpenAI)
SD: 0.05
MAPD: 0
Confidence: 5.5
Conf Mode: Normal
Mellers: 0.12
Reverse Mellers: 0.29
Theory of Mind: 0.3 (What did the LLMs think other LLMs predicted?)
Beta Distribution: 0.48
Close Type: A (B = cautious # closer to 50%; A/C = closer to extremes)
# LLM responses: 2
Explanations of the above statistical measures here —>
Model value: 20%
The predictions about Germany’s economic outlook underline a moderate growth forecast, with GDP expected to rise by 2% in 2025 and 1.3% in 2026, aided by temporary fiscal expansion and energy subsidies aimed at enhancing industrial competitiveness. Historical trends suggest that Germany’s proactive fiscal policies have been effective in mitigating recession risks, although it faces structural challenges and potential external shocks. There is a 20% historical base rate for recession, but current measures are expected to reduce this risk. However, unforeseen geopolitical or macroeconomic events, failure of the energy subsidy scheme, or unaddressed structural issues could threaten this positive trajectory, potentially leading to economic stagnation or a recession.
Runtime: 204 seconds.
Past forecasts by Phil’s and Jeremy ’s bots —>
