Spring in the German economy: an upswing expected

Spring in the German economy: an upswing expected

Spring really heats up in May. Summer temperatures are expected throughout Germany and blue skies as far as the eye can see. This not only brightens the minds of Germans, the German economy also gets a touch of spring. The gross domestic product (GDP) in Germany rose by 0.2 percent compared to the same quarter last year, according to the Federal Statistical Office on Tuesday. What sounds like a small step should not be underestimated. The mini-recession of the previous year turned into mini-growth in the first quarter.

The general mood in the German economy has improved for the third time in a row. The most important economic barometer, the ifo business climate index, climbed to 89.4 points (in March it was 87.9 points), the best value since May 2023. In the survey, 9,000 companies assess both the prospects for future business and the current situation. Expectations are noticeably less pessimistic, particularly in the construction industry.

There are positive developments at various companies. Adidas is experiencing robust growth, particularly in China and Latin America. The sporting goods manufacturer was able to generate a profit of 170 million euros. Germany's largest residential real estate group, Vonovia, made a profit again, while Mercedes-Benz and Volkswagen showed different developments. Lufthansa recorded an increase in group sales, but strikes weighed on business.

The inflation rate in Germany remained stable, while real wages rose again this year. There are fewer unemployed people in Germany compared to the previous month, but 164,000 unemployed people have been added compared to the previous year, which is due to the still weakening economy. Energy prices are still high and the skills shortage remains a problem, but a touch of spring is slowly coming to the German economy.