Konjunktur: Volksbanken verdoppeln Prognose für deutsche Wirtschaft

The Bundesverband of German Savings Banks and Raiffeisen Banks (BVR) has become significantly more optimistic about the German economy and has doubled its growth forecast. It now anticipates a price-adjusted increase of 1.0 percent in the gross domestic product (GDP) for the current year, up from the previous projection of 0.5 percent.

The BVR also maintains its growth projection of 1.3 percent for 2027. According to BVR Chief Economist Andreas Bley, the low water in the Rhine and a heatwave are only temporarily hindering the economy's recovery. Recent months have shown signs of a rebound in the economy after years of weakness.

The German economy has grown in three consecutive quarters, and early indicators are also brightening. Bley highlights a gradual revival of industry, increased dynamism in construction, and strong exports, which reached a record high in June. Additionally, government spending on defense, infrastructure, and climate protection is expected to provide further growth boosts to the economy.

However, a brief slowdown in growth is anticipated in the third quarter due to the low water levels, though the economic damage is expected to be temporary. As the water levels normalize in the coming weeks, the economy should rebound slightly in the fourth quarter. The BVR also expects higher consumer prices: it projects an inflation rate of 2.8 percent this year and 2.5 percent in 2027.

The inflation spike may temporarily exceed the three percent mark, especially due to higher energy and transportation costs.