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Deutsche Bank Comments on Germany's GDP

BY MT Newswires | ECONOMIC | 08/28/25 12:29 PM EDT

12:29 PM EDT, 08/28/2025 (MT Newswires) -- The August vintage of the sentiment indicators continues to signal a quarterly German gross domestic product growth rate of a "good" 0.2% quarter over quarter for Q3, which is above the consensus expectation of 0.1% and slightly below Deutsche Bank's forecast of 0.3%.

Compared with the Composite PMI, the Ifo Business Climate Index might currently be overstating the economic performance in Q3, wrote the bank in a note. At the same time, consumer confidence has been more subdued recently.

The downward revision of the Q2 GDP growth rate to a 0.3% quarter-over-quarter contraction puts a question mark on the 2025 annual forecast, given Deutsche Bank's assumed and still unchanged quarterly growth rates for Q3 and Q4.

The latter reflects the bank's expectation that strong government investment incentives, already announced in June, will now generate positive impulses from the second half of 2025.

Deutsche Bank remains optimistic that next year, the now clearly expansive fiscal policy will increasingly unfold and drive the domestic economy. This will be even more true if it's also accompanied by supply-side structural reforms.

Against this background, the bank expects economic growth of 2.0% and 1.5% for 2026 and 2027 respectively.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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