German government to raise forecasts due to strong H1, source says

By Holger Hansen

BERLIN, ‌Oct 2 (Reuters) - ​The ​main driver behind the German government's raised economic forecasts is an unexpectedly strong performance ‌of the German economy in the first half ⁠of the year, a government source told Reuters on ‌Friday.

"The economic recovery still lacks ‌a broad base: private consumption and corporate investment are developing only sluggishly, while structural problems affecting ​Germany as a business location persist," the source said.

A person familiar with the draft told Reuters ⁠on Thursday that the government raised the growth forecast to 1.3% in ​2026 and 1.1% in 2027. It had expected 0.5% growth for 2026 and 0.9% ​in 2027 in its April ‌forecasts.

The new government forecasts - which will be published on October 8 - are in ⁠line with those of Germany's leading economic institutes, which were published at the end of September.

The economy ministry ⁠directed Reuters to the release scheduled for next week and declined ​to comment further.

The fiscal measures introduced so far are expected to raise GDP by 1% by the end of ‌2027, according to the source.

For 2028, the government expects growth of 0.6%.

The public ‌sector will remain a driver of growth, although to ⁠a lesser extent than ‌in previous years, ​the source said about 2028.

(Reporting by Holger Hansen, writing by Maria MartinezEditing by Ludwig ‌Burger)

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