Germany's gross domestic product grew by 0.3% in the second quarter, up from the preliminary estimate of 0.2%, as stronger exports offset declines in investment, the statistics office reported on Tuesday.
The revision follows a 0.4% expansion in the first quarter, marking the third consecutive quarter of growth after two quarters of stagnation in 2025. Exports rose 2.0% quarter-on-quarter, the primary driver of growth alongside a 0.1% increase in household consumption. Investment, however, declined by 0.2% compared with the previous three months.
The Ifo Business Climate Index increased to 88.8 in August from 86.7 in July, exceeding analyst expectations of 87.2. The Ifo Economic Expectations sub-index also rose to 89.1 from 86.8, signaling improving sentiment among businesses.
The recovery comes despite headwinds including elevated energy prices tied to geopolitical tensions in Iran, low water levels on the Rhine river disrupting transport, and political uncertainty ahead of state elections scheduled for September. The economy ministry had already downgraded its 2026 growth forecast to 0.5% in April, from a previous estimate of 1.0%.
Clemens Fuest, president of the Ifo Institute, noted that the economy is recovering despite renewed energy price increases. Ruth Brand, president of the statistics office, said the economy is maintaining growth momentum seen at the start of the year.
Analysts highlighted the resilience of the recovery. Harry Chambers, assistant economist at Capital Economics, said the economy is still growing despite higher energy prices and transport disruptions. Carsten Brzeski, global head of macro at ING, described the expansion as encouraging, noting it aligns with the best growth performance since 2022.
The government has pledged a €500 billion infrastructure fund to support a rebound in growth, though its impact remains to be seen.
