Frankfurt am Main – September 10, 2026 -- Germany has a realistic chance of restoring potential economic growth to more than 1% annually over the coming decade, according to a new KfW Research study, up from a rate that has slipped to barely above zero after standing near 2% in 2015.
KfW ties growth recovery to labor, capital and productivity gains
The study, titled "Standort Zukunft. Wie Deutschland zu neuer Stärke und Wachstum findet," identifies productivity as the most critical lever for reversing more than a decade of stagnation. KfW CEO Stefan Wintels and Chief Economist Dirk Schumacher presented the findings alongside a twelve-point policy paper in Frankfurt.
Wintels calls for Germany to become the top industrial AI adopter, not a model developer
"We don't need to become the world champion in developing AI models in the short term, but the number one application country for AI in industry and the Mittelstand," Wintels said, adding that productivity emerges primarily from everyday application rather than research leadership. He set a target for Germany to rank again among the world's leading technology and innovation locations by 2035.
Chief economist pushes for bureaucracy cuts as a hard location factor
Schumacher argued that every new regulation should be tested against its purpose, follow-on costs, and impact on entrepreneurial initiative, describing lean administration as a hard competitiveness factor rather than a secondary issue.
Deutschlandfonds targets EUR130 billion in mobilized investment
The twelve-point paper calls for easier access to equity, venture and growth capital to fund innovation and scaling. The Deutschlandfonds, launched at the end of 2025 and implemented by KfW on behalf of the federal government, is positioned as the operational bridge for this capital mobilization. Through roughly EUR30 billion in public funds and guarantees, the fund aims to unlock approximately EUR130 billion in investment across the German economy in coming years.
The twelve-point paper frames growth as dependent on improved conditions for private and public investment, competitive energy supply, securing skilled labor, a more innovation-friendly environment, and stronger European and international integration of the German economy.