Germany raises growth forecast and economy is on the path to recovery
The German Ministry for Economic Affairs and Energy published its monthly report. The German government increased its growth forecast to 1.3 percent.
According to the monthly report published by the German Ministry for Economic Affairs and Energy, while the country's economy continues to remain on the recovery path, the German government raised its economic growth forecast for this year from 0.5 percent to 1.3 percent.
Temporary Slowdown During the Summer Period
According to the report published by the Ministry for Economic Affairs and Energy, the economy experienced a temporary slowdown during the summer period following the revival in the first half of the year. The loss of momentum in the third quarter was caused by a reduction in global inventories of energy-intensive products and the decline in river water levels.
Short-Term Expectations in the Domestic Economy
Considering the purchasing power losses stemming from high energy prices and rising financing costs, no major mobility is expected from the domestic economy in the short term. The outlook depends on the course of the wars in Iran and Ukraine.
Increase in the Production Sector in August
It was noted that the production sector recorded a calendar and seasonally adjusted increase of 2 percent in August compared to the previous month. It was stated that the extraordinary expansion in the construction and complementary sectors was effective in this increase.
Inflation and Employment Data
It was announced that the consumer price index rose by 3.3 percent on an annual basis in September. It was emphasized that energy prices increased by nearly 15 percent annually, acting as the biggest factor in inflation.
Updates in Growth Forecasts
The German government increased its economic growth forecast for this year, which was previously announced as 0.5 percent, to 1.3 percent. Meanwhile, the OECD raised its 2026 growth forecast for the German economy from 0.7 percent to 1.1 percent.