Bundesbank Raises Germany 2026 Growth Forecast to 1%

Bundesbank President Joachim Nagel announced that Germany's economy is on track to expand by 1% this year, doubling the 0.5% growth projected in June. Speaking in an interview with Le Monde, Nagel attributed this resilience to solid export figures, decent manufacturing orders, and significant government spending on infrastructure and defense.

These factors helped the economy offset energy cost surges and the impact of the conflict in Iran. The Bundesbank indicated the country is on a path to recovery following stronger-than-expected expansion during the first two quarters of 2026.

While Nagel noted that growth remains modest, the update comes amid a global bond market selloff that has pushed yields to multi-year highs. Analysts suggest this current volatility is less severe than the market rout experienced in 2022.