Germany’s economy could grow around 1% this year, roughly twice the Bundesbank’s latest projection, Bundesbank President Joachim Nagel said. He attributed the potential improvement to robust export demand and a government fiscal package financing additional spending on defence, infrastructure and climate protection. Germany, the world’s third-largest economy, has barely expanded for three years, while the Iran war and elevated energy costs are expected to weigh on industry. Even so, output has proved resilient and the economy is in a cyclical upswing, although its potential growth remains sluggish. Stronger-than-expected German activity is helping forecasters raise their euro zone projections, with the bloc now seen expanding at or above its 1% growth potential this year. The stronger performance also risks increasing inflationary pressure: price growth is near twice the European Central Bank’s 2% target and could accelerate, potentially prompting further interest-rate increases.