German Chancellor Friedrich Merz says Germany has an opportunity to achieve 1% economic growth next year as his government intensifies economic reforms and public spending to revive growth, strengthen business confidence and improve the country’s economic outlook after years of weak performance.
Merz made the remarks after a cabinet meeting at the Neuhardenberg estate, about 70 kilometres east of Berlin, where he sought to reassure the public and investors about the government’s economic direction.
“I am confident that we have the opportunity to achieve 1% GDP growth next year,” Merz said.
The Chancellor spoke alongside Finance Minister Lars Klingbeil, whose centre-left Social Democratic Party is the junior partner in the governing coalition.
Both ministers rejected suggestions that disagreements within the coalition were affecting efforts to revive Germany’s economy and improve the government’s declining standing in opinion polls.
Germany’s economy ministry had lowered its 2026 growth forecast in April to 0.5% from 1%, citing increased energy costs linked to the war in Iran.
Pressure on Merz’s coalition has also increased following a cabinet reshuffle that caused dissatisfaction among members of his own party and raised concerns about the government’s effectiveness.
The coalition is also facing a growing challenge from the far right ahead of state elections next month.
Despite the political pressure, Merz and Klingbeil pointed to recent economic data and business surveys as signs of an improving outlook.
Germany’s economy, which has experienced years of weak growth, expanded more strongly in the second quarter than initially estimated, while business confidence rose in August to its highest level in a year.
Merz also said he had instructed federal ministers to develop proposals to address trade imbalances between the European Union and China as part of efforts to strengthen Germany’s economic position.
Goodness Anunobi
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