(Aug 2): Germany’s economy could expand by 1% this year, twice the pace projected only three months ago, Bundesbank president Joachim Nagel told Le Monde.

“Based on the first two quarters, we are on track to reach about 1% this year, which is significantly better than our June forecast,” Nagel said in an interview published Wednesday. Back then, the Bundesbank expected 0.5% expansion for 2026, followed by 0.8% and 1.4% in 2027 and 2028.

While growth is “still not very high", export figures were “fairly solid” and manufacturing orders were "decent", said Nagel, who’s also a member of the European Central Bank’s Governing Council.

Europe’s largest economy has proven more resilient than expected to the Iran conflict and the surge in energy costs, thanks in part to hundreds of billions of euros in infrastructure and defence outlays.

The Bundesbank said already last month that the country is finally on a path to recovery, highlighting better-than-expected expansion in the first two quarters as well as a recent data revision showing stronger momentum than previously thought since the end of 2023.

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