The federal government is expected to grow 1.3% for 2026 and 1.4% for 2027, thanks to the state spending on infrastructure and defense, Economy Minister Katerina Rahhe said today and spoke of “signs of improvement” of the situation in the economy. For this year, however, the climate remains sluggish, with a prediction of a marginally positive sign, at 0.2%.

“After two years of shrinking economic production, a small economic economic recovery emerges in the fall of 2025. In changing the year, domestic economic production is expected to gain dynamic, backed by the federal government’s economic and fiscal policy,” the federal government said in a statement. Year, from 1.0% to 1.3%.

As the ministry points out, the economic recovery will not come from the export sector, as was usually the case in the German economy, but mainly from domestic demand. “Stable price developments, significant wage increases and targeted cost relief for private households will boost real incomes available in the coming years,” Katerina Reiche explained and, referring to state spending, noting that “a significant part of the public is expected to be a significant part of the public. with the Special Fund and Defense Investments. ” But even this impulse will be effective “only if investments are implemented quickly,” the minister warned, and spoke of the need for further reforms: “To reduce energy costs, to promote private investments that face high tax and tariff burden, to reduce other countries,

The Ministry of Economy’s estimates were confirmed by the Federal Statistical Service, according to which German companies reduced their production to August in August in March 2022. In particular, industry, construction and suppliers.

“This is another serious blow to the German economy,” said LBBW analyst Yen -Eliver Niclas, anticipating a further reduction in economic production for the third quarter. “Instead of autumn reforms, a winter is now threatened with our dissatisfaction,” the economist said, referring to Chancellor Friedrich Mertz’s statement on extensive reforms in the near future.

The German Industry and Chamber of Commerce (DIHK) is evaluating, for its part, as a signal of awakening that “the basic industrial sectors collapse”, among other things, the high cost of energy and labor, taxation and bureaucratic burden. As the Chamber points out, the weak situation in orders does not promise recovery soon, while the German Banks Association (BDB) estimates that next year, the government financial package will contribute up to 0.8 points to total economic growth. At the same time, the negative development of production in August this year is mainly due to the sharp decline in Germany’s largest industry, the automotive industry, “the statistical service said in its statement.