Germany raised its 2026 growth forecast to 1.3% from 0.5%, but August exports fell 0.8% and ECB chief economist Philip Lane warned that fiscal support turns into a headwind in 2027 and 2028. The ECB's 2.50% deposit rate faces a December test.
ING says August’s export miss dents the narrative of German resilience after a run of stronger production and sentiment prints. Source
Three documents out this week describe one economy and reach three different verdicts. Berlin's autumn projection says Germany is past the trough. The ECB's account of its September meeting says the euro area is resilient enough to take a rate hike. ECB Chief Economist Philip Lane says the fiscal support under both views becomes a headwind in 2027 and 2028.
