Germany is governed by a centre-right coalition under Chancellor Friedrich Merz (CDU), with rising far-right support as the AfD leads polls at 26% and secured a state parliament presidency in Saxony-Anhalt for the first time since 1945. The economy shows mixed signals: GDP growth forecasts were raised to 1.3% for 2026, but inflation rose to 3.3% in September 2026 (Eurostat), and public finances are strained by EU fiscal concerns and new tax plans.
