German economic institutes raise growth forecast, business confidence rises

Germany's leading five economic think tanks raised their GDP growth forecast for this year from 0.6 percent to 1.3 percent, citing the global recovery and investments in defense and artificial intelligence. Over the same period, the Ifo Business Climate Index reached 89.9 points in September.

Growth Forecasts Revised

Germany's leading five economic think tanks updated their growth forecasts for the country's economy, citing the recovery in the global economy as well as investments in defense and artificial intelligence.

In the joint report, the GDP growth forecast for this year was raised from 0.6 percent to 1.3 percent.

Economic Recovery Process

It was stated that the German economy entered a recovery process starting from the end of 2025, with production volume increasing over the last three quarters and rising above the levels seen before the 2022 natural gas crisis.

Inflation and Employment Expectations

Consumer prices are expected to rise by 2.8 percent this year and 3.2 percent next year, while the inflation rate is projected to decline to 2 percent by 2028.

The unemployment rate is forecasted to be at 6.4 percent this year.

Ifo Business Climate Index

Announced by the Ifo Institute for Economic Research, Germany's September Business Climate Index came in above the market expectation of 89 points, reaching 89.9 points.

Thus, the index continued its upward trend for the fifth consecutive month.