German growth stronger than expected, seen picking up: Bundesbank chief
The central bank said manufacturing is rebounding while private consumption stays weak and investment fell, despite a government spending boost.
- On Wednesday, Bundesbank President Joachim Nagel said German economic growth will accelerate this quarter as Europe's largest economy recovers faster than expected, despite deep structural challenges.
- Germany stagnated for three years as its industrial sector lost competitive edge, but current assessments now point to stronger recovery than the 0.5% growth rate the Bundesbank forecast in June.
- Manufacturing recovery in chemicals and electrical equipment is driving gains, though Nagel added, "However, the recovery is not yet broad-based," citing subdued consumption and declining equipment investment.
- Nagel emphasized Germany needs labour market reforms to address its shrinking working-age population, alongside energy transition efforts and increased private investment to foster stronger growth.
- Meanwhile, inflation slowed last month to 2.8% from 3.3% in September, as major forecasters expect growth to persist in the coming years despite Germany's longstanding economic hurdles.
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62 Articles
Leading economists expect significantly stronger economic growth in Germany for this year and coming.
On Thursday, Friedrich Merz, the annual report of the German Council of Economic Experts confirms the resumption of activity, but warns about the increase in public expenditure, particularly in the defence sector.
The German economy is again growing slightly. However, economists warn: Without reforms, higher productivity and sound public finances, wealth losses, rising debt and burdens for future generations are threatening.
In the coming years, the gaps in the Federal Government's financial planning are expected to rise to gigantic sums, warns the economists. Even comprehensive reforms and austerity measures were not enough to close these gaps.
Finally good news for the German economy! The first time since 2022 the economy is getting back in motion.
Despite positive growth forecasts, economic evidence warns against significant financing problems in the federal budget. They demand reforms in pension, health and care insurance.
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Bias Distribution
- 57% of the sources are Center
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