Bundesbank's Nagel sees lasting recovery, doesn't rule out another rate hike
Speaking at the IMF meetings in Bangkok, Joachim Nagel said growth could last into 2027 and possibly 2028, and he did not rule out further ECB action on inflation.
Archive image · Photo: Leonhard Lenz / Wikimedia Commons, CC BY 4.0 (cropped and resized)
Bundesbank President Joachim Nagel said Germany's economic recovery is not a short-lived flash in the pan. Speaking on the sidelines of the International Monetary Fund's annual meetings in Bangkok, he told dpa he expects growth to continue in 2027 and possibly into 2028, with the government's reform package and artificial intelligence adding momentum. The IMF recently raised its 2026 growth forecast for Germany to 1.3%.
Nagel also did not rule out further action against inflation if conditions stay as they are. The European Central Bank has raised interest rates twice recently, and eurozone inflation stood at 3.8% in September. Economists expect a third hike this year. Germany is heading for a sixth straight year of inflation above the 2% target.
Nagel said deciding rates meeting by meeting is the right approach given highly volatile markets, and that the ECB aims to reach its 2% target over the medium term.