economy
February 18, 2026
Germany's long-awaited fiscal stimulus is finally here
Germany's defense spending is set to surge this year, but the country may not execute on its "ambitious" budget target, Goldman's analyst said.
TL;DR
- Germany's fiscal stimulus plan is showing positive effects on economic data.
- 74% of investors expect European growth to accelerate, with Germany's stimulus identified as the primary driver.
- The stimulus package includes a 500 billion euro infrastructure fund and a defense spending increase.
- Goldman Sachs analysts warn that defense spending may fall short of ambitious budget ramp-up targets.
- German factory orders have surged, with some orders likely related to defense.
- Friedrich Merz highlighted the changing global security landscape at the Munich Security Conference.
- Spending on infrastructure areas like transport, energy, and digital is expected to increase, though execution may vary.
- Total federal spending is predicted to grow, but may fall short of the government's budgeted target by approximately 33 billion euros.
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