Bundesbank President Expects German Growth Around 1% This Year, Double June Forecast
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Bundesbank President Nagel said on the 2nd that Germany's growth rate this year could be around 1%. Strong export demand and government investment are contributing, making it double the 0.5% forecast the bank issued in June. In a speech, Nagel said production has been unexpectedly resilient and that although potential growth remains low, Germany is in a cyclical recovery phase, adding that "there is a good chance that real economic growth will average around 1% for the year." He cited federal government fiscal spending focused on defense and infrastructure as one of the drivers of growth, and said Germany is also benefiting from unexpectedly strong overseas demand. Germany's leading economic research institutes also revised up their growth forecasts for this year and next late last month, raising this year's forecast from 0.6% to 1.3%.