Development of business conditions and the operating environment
Rentenbank’s economic performance is shaped primarily by conditions in the lending and financial markets. These are influenced to a significant extent by central bank monetary policy, price and exchange rate developments, and trends in public finances.
Macroeconomic outlook
The persistent uncertainties seen in 2025, caused by geopolitical conflicts, erratic US tariff policy and further trade tensions, will continue in 2026 and weigh on economic activity worldwide to varying degrees. As an exporting nation, Germany is particularly affected by these developments.
According to the International Monetary Fund (IMF), global economic growth of 3.3% is expected in 2026. For Germany, however, the IMF anticipates a much lower increase in gross domestic product (GDP) of only 1.1% year on year.1 According to Deutsche Bundesbank, this growth is likely to be driven primarily by the federal government’s expansionary fiscal stance, with additional public spending on defence and infrastructure.2
The price trend is expected to continue broadly sideways. According to Deutsche Bundesbank, growth in the Harmonised Index of Consumer Prices (HICP) will remain almost unchanged in 2026 compared with the previous year, averaging 2.2% for the year after 2.3% in the previous year.3 This would leave it only slightly above the European Central Bank’s (ECB) target of 2%.
Against the backdrop of low inflation rates, key interest rate increases are not currently expected either in the euro area or in the United States. However, owing to the rising financing needs of sovereign issuers and the first interest rate increases in Japan, Rentenbank expects the capital market yield curve to steepen over the further course of the year, while volatility remains elevated. If geopolitical tensions intensify, a flight to safe government bonds can no longer be taken for granted; instead, investors may also demand higher risk premiums in this segment in future.
Outlook for the economic environment in promotional activity
Investment activity in the agriculture and agribusiness sector, and thus also demand for special promotional loans, is influenced by a wide range of factors. These include the development of general economic conditions, which affect demand and prices in agricultural markets. However, investment behaviour in agriculture also depends heavily on political and regulatory conditions as well as on public funding.
The Association of Chambers of Agriculture (Verband der Landwirtschaftskammern; VLK) expects declining business results for agricultural enterprises of all types in the current financial year 2025/26. Despite high yields of market crops and basic fodder from the 2025 harvest across Germany, farms face significant economic challenges, as market prices – particularly for arable crops and most animal products – are under pressure, not least due to challenging conditions in national and international agricultural markets. With regard to agricultural inputs, the VLK expects some easing in expenditure on seeds and planting materials as well as fuels. By contrast, higher costs are anticipated for fertilisers, crop protection, services and personnel.4
The “Rentenbank Agricultural Barometer” survey commissioned by Rentenbank reflects farmers’ assessment of their current and future economic situation in Germany. According to the latest survey results from December 2025, the assessment of the future economic situation has deteriorated further compared with the September survey. Farms engaged in pig and poultry farming assess their future economic situation somewhat more positively than other types of operations. High agricultural input costs, agricultural policy and low producer prices are the main reasons for negative assessments. Despite the subdued sentiment, 62% of respondents are planning investments (previous survey: 60%), albeit with a somewhat lower average investment volume.5
The economic recovery in Germany also offers growth opportunities for companies in the agribusiness sector. Nevertheless, challenges remain, particularly with regard to labour and energy costs, while uncertainties arising from geopolitical crises and US tariffs continue to weigh on exports. Certain food trends observed in recent years are expected to persist, such as health awareness, sustainability and convenience.6
In the field of renewable energy, Rentenbank expects further growth momentum. For 2026, the German Wind Energy Association (Bundesverband Windenergie; BWE) anticipates additional gross installations of wind power capacity of between 8 and 8.5 GW.7 By contrast, the German Solar Association (Bundesverband Solarwirtschaft; BSW) expects a slight decline in photovoltaic expansion and anticipates a deterioration in the funding environment and regulatory framework.8
Geopolitical tensions are leading primarily to higher price volatility in agricultural markets, affecting both agricultural commodities and agricultural inputs such as energy, fertilisers and construction materials. In addition, agricultural input costs are expected to rise further as a result of the increase in CO₂ taxation on heating and motor fuels at the beginning of 2026, and from 2026 onwards the EU’s carbon border adjustment mechanism will make imported mineral fertilisers more expensive.9
In general, volatile agricultural markets (including those affected by weather events) are not a new phenomenon for agriculture. We therefore do not expect international crises to have any significant impact on our promotional activity. Only under extreme scenarios is a degree of restraint in agricultural investment to be expected. As an instrument, we offer liquidity assistance loans.
German agricultural exports to the United States are of minor importance (1.3% of total German agricultural exports)10, meaning that the imposition of tariffs by the United States has no material impact on German agriculture, with only a few exceptions (e.g. viticulture). Accordingly, US tariff policy is also unlikely to have a significant effect on our promotional activity.
In January of the current year, a comprehensive free trade agreement between the EU and South American countries (the Mercosur Agreement) was signed and is currently under review by the European Court of Justice. This will create the world’s largest free trade area, in which tariffs on more than 90% of exports are to be eliminated. This will improve access for German agribusiness to the markets of the Mercosur countries, for example for dairy products, confectionery, fresh fruit and wine, particularly also for organic products and processed foods. In addition, protection for traditional geographical indications (e.g. “Black Forest ham”) will be strengthened. The opening of the European market to imports of beef, poultry, sugar and ethanol is limited by supply quotas, long transition periods and bilateral safeguard clauses. Imports from Mercosur countries will also continue to be subject to EU regulatory requirements.11 It is currently unclear when the agreement will enter into force. No impact on our promotional activity is expected.
The same applies to the current free trade agreement between the EU and India. While this improves access for German agribusiness to the Indian market, certain European agricultural sectors remain fully protected, as products such as beef, poultry meat, rice and sugar are excluded from liberalisation. All imports from India will likewise remain subject to EU regulatory requirements.12