Ifo raises forecast for German economy as recovery continues

“The German economy continues to recover,” says Ifo’s head of forecasting, Timo Wollmershäuser, in a press release.

Growth is being dampened by higher energy prices and low water levels in the country’s rivers. But foreign aid and increased investment in infrastructure, climate and defence are boosting growth.

“There are glimmers of hope, especially for the crisis-hit industrial sector,” says Wollmershäuser.

German inflation is expected to rise to 2.8 percent this year and 3.0 percent in 2027, before falling to 2.3 percent in 2028, according to the Ifo forecast.

Economists at IFW in Kiel also raised their German GDP forecast on Thursday.