German economy is recovering better than expected: institutes raise forecast
Leading economic institutes expect GDP growth of 1.3 percent this year instead of the previously forecast 0.6 percent.
Quick Look
- The German economy is recovering better than expected in the spring.
- Leading institutes are raising their GDP forecast for this year to 1.3 percent, supported by growing exports and milder than feared effects of the Iran war.
AI-generated summary
Why It Matters
In the spring, economic institutes gave a lower forecast of 0.6 percent for GDP growth in Germany due to the Iran war.
The German economy has recovered better than expected in the spring. Leading economic institutes expect gross domestic product to grow by 1.3 percent this year. In their spring forecast, the institutes had assumed 0.6 percent.
Experts expect the upswing to continue in the next two years. They expect an increase of 1.1 percent for 2027 and 0.4 percent for 2028.
»The economy has developed more robustly than expected. However, the upswing is based on a thin foundation because high energy prices and structural problems are a burden," says Oliver Holtemöller from the Leibniz Institute for Economic Research Halle (IWH).
The economic institutes cited, among other things, an increase in exports as reasons for the positive development. The negative consequences of the Iran war are also not as bad as feared. "The energy price shock associated with the Iran war has slowed the German economy, but the higher prices for fuel and heating oil have so far hardly spread to other consumer prices," says the joint statement. In the spring, the economic institutes revised their forecast downwards due to the Iran war.
Open Questions
- How will the structural problems develop in the long term?
- Are political countermeasures effective against high energy prices?
