Strong exports and resilience despite the oil price shock: the German economy is faring better than expected. The DIW and the Bundesbank are becoming more optimistic about the outlook. Yet there are also warnings.
The German economy is set to grow more strongly in 2026 than previously forecast, according to the head of the country’s central bank, the Bundesbank.
Based on growth in the first half of the year, Germany is “well on the way to achieving around 1% this year, which is significantly better than our June forecast”, Bundesbank President Joachim Nagel told French daily Le Monde in an interview published on Wednesday.
In June, the Bundesbank had forecast a 0.5% increase for the current year, adjusted for price and calendar effects.
In the first two quarters of the current year, gross domestic product (GDP) rose by 0.4% and 0.3% respectively compared with the previous quarter. The German economy also grew in the final quarter of 2025.
Nagel noted that, whilst growth was still not particularly high, export figures had recently been solid and order intake in the manufacturing sector satisfactory.
At the same time, the Bundesbank president warned about the rise of populist parties such as Germany’s far-right Alternative for Germany (AfD), particularly over calls to abandon the euro.
“There are people in Germany who claim to be patriots, yet at the same time propose abandoning the euro,” he told the newspaper. “I must remind people that Germany has achieved enormous prosperity thanks to the single currency – just like France and the entire monetary union.”
Source: dpa
