Germany’s government has raised its economic growth forecasts to 1.3% for 2026 and 1.1% for 2027, from April projections of 0.5% and 0.9%, respectively. It expects growth of 0.6% in 2028 after the economy expanded 0.3% in the second quarter. The recovery is being driven mainly by debt-financed infrastructure investment, stronger armed-forces spending and exports, while domestic consumption remains subdued. Export growth is forecast at 3.7% this year, slowing to 2.1% in 2027 and 1.1% in 2028. Inflation is projected at 2.7% in 2026 and 3.0% in 2027 before easing to 2.2% in 2028, with higher petrol and diesel prices affecting consumers. The government is due to present the forecasts officially on October 8.