Economy: Industry increases quality, government spending takes effect – Is the economic upswing coming now?
Better economic data are fuelling hopes of a turnaround, and some researchers are doubling their forecasts for the current year. But Germany still has to overcome structural problems.
German Chancellor Friedrich Merz has expressed optimism about the country's economic prospects, citing a fourth consecutive rise in the business climate index and growth in the economy for three quarters. According to an unpublished UBS analysis, the German economy is expected to grow by 0.9% this year and 1.5% in 2027, driven in part by the government's investment program.
However, economists and government representatives warn that the recovery is likely to be temporary and driven by high state spending, and that structural problems remain unresolved. The Ifo index has risen for the fourth consecutive time, and the GDP grew by 0.3% in the second quarter, slightly stronger than expected.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
