Despite the recent fluctuations in German GDP growth, optimism has returned to the German economy. The latest data shows that sentiment indicators have improved and activity has increased since the start of the year. However, Germany’s early 2022 level has not yet been fully recovered due to the Russian invasion of Ukraine.
Looking ahead, the German economy is expected to gain more momentum in the coming months. Strong wage growth and a cautious recovery in private consumption are expected to drive this growth. However, there are still several cyclical factors that could impact economic activity, such as higher oil prices due to ongoing military conflicts and potential job losses from company restructurings.
Despite these challenges, Germany’s structural weaknesses will continue to be a factor limiting the pace of any rebound. It is projected that the German economy will grow by around 0.3% this year, but there are still many unknowns that could affect the country’s economic outlook in the coming months.