Merz vows 1% growth next year as coalition pushes back on infighting claims
Chancellor Merz pledges at least 1% GDP growth in 2026, citing reforms and better data, as coalition leaders deny internal friction.
Chancellor Friedrich Merz has pledged to steer Europe's largest economy back to growth, setting a target of at least 1% GDP expansion next year. Speaking after a cabinet retreat east of Berlin, Merz said business-friendly reforms and higher government spending would underpin the recovery.
"I feel encouraged in my assessment that we have the opportunity to achieve a one before the comma for the next year," he told reporters, referring to the growth figure.
Merz appeared alongside Finance Minister Lars Klingbeil, whose centre-left SPD shares power with Merz's conservative CDU. The two dismissed suggestions that coalition infighting was undermining the government's agenda, even as opinion polls slide and a cabinet reshuffle has angered some within Merz's own party.
The upbeat forecast contrasts with the economy ministry's April projection of just 0.5% growth for 2026, which was cut from 1% due to higher energy costs linked to the war in Iran. However, recent data supports a more positive outlook: second-quarter growth was stronger than initially estimated, and business morale hit a one-year high in August.
Merz also said he had asked federal ministers to develop proposals to address trade imbalances between the European Union and China. The comments come as the coalition faces a far-right challenge in upcoming state elections next month, adding pressure on the government to show results.