German Chancellor Olaf Scholz is optimistic about his country’s economic future, citing factors such as record employment levels and decreasing energy costs. He highlighted the noticeable increase in production in energy-dependent sectors since the beginning of the year, as well as the overall growth of the industry.
Scholz also mentioned potential European Central Bank interest-rate cuts and a rise in the benchmark DAX Index, along with increasing confidence among German businesses and consumers. Addressing attendees at a major trade fair in Hanover, he emphasized the stability of real gross value added in the industry despite inflation and temporary production declines.
The Bundesbank recently stated that Germany likely avoided a winter recession due to improvements in manufacturing, rising exports, and increasing construction at the start of the year. Upcoming data, including purchasing-manager surveys and the Ifo business sentiment index, is expected to confirm this positive trend. Despite this economic upturn, Scholz’s Social Democrats are struggling in the polls, with the latest survey showing them with only 15% support nationally. The ruling coalition is working to regain voter support by extending the power price brake scheme and introducing more tax incentives for research and development in Berlin’s next growth package.
