German Chancellor Confident of Securing 1% Growth by 2027 Through Reforms and Spending Increases
Macro
German Chancellor Merz expressed confidence on the 26th that reforms to boost business activity and increased government spending would lift the economy, ensuring at least 1% growth by 2027. At a press conference after a cabinet meeting near Berlin, he indicated that next year's GDP growth is likely to be 1%, and also revealed that he had instructed ministers on measures to address the trade imbalance with China. Merz, along with Finance Minister Klingbeil of the coalition Social Democratic Party, pointed out that recent economic indicators and surveys show improving trends, and dismissed the view that internal government conflicts are affecting approval ratings. In Germany, there are concerns about the rise of far-right forces, and with state elections in September approaching, a cabinet reshuffle has sparked internal party opposition, increasing pressure on the government. Notably, the German Economy Ministry in April revised its 2026 growth forecast downward from 1% to 0.5%.
