Optimistic Growth Expectation from the Minister: Government Spending is Clearly Ahead

Germany's Economic Growth Targets Are Increasing

In a speech at the energy forum held in Berlin, German Minister of Economy Reiche stated, "We agree that this year's and next year's economic growth will be almost entirely driven by government spending."

Government-Supported Growth Strategies

The Minister expressed that funds financed by special borrowing for climate change, modernizing Germany's infrastructure, and strengthening its armed forces will make up the largest share of this growth.

Last Year's Growth and Future Predictions

Germany experienced growth last year, marking its first expansion in three years. However, German Chancellor Friedrich Merz considered this growth insufficient.

Reiche is expected to announce the government’s updated economic forecasts on Wednesday. Other forecasting institutions are presenting more optimistic figures. The Bundesbank predicts a recovery of the economy by 2026, while the International Monetary Fund (IMF) raised its growth outlook to 1.1% last week.

Market Expectations: Public and Private Sector Growth

This year, public sector growth is forecasted to be 8%, while private sector growth is expected to be between 1.1% and 1.8%.