At a press conference held in Bangkok on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, Bundesbank President Joachim Nagel commented on the economic outlook for Germany and Europe. 

Looking at the current forecasts, he expressed optimism: The forecasts are rising. And that’s good news. Things are progressing. Mr Nagel highlighted the fact that the IMF had raised its 2026 growth forecast for Germany to 1.3 %.

Germany needed to take advantage of this positive development and prepare itself well for future challenges, Nagel said. He spoke of a “fitness programme” for the German economy. To this end, it was important to consistently implement and continue with the reform agenda, he noted. 

Turning to monetary policy, Mr Nagel reiterated the objective of bringing inflation back to 2 % over the medium term. He noted that the European Central Bank had recently raised key interest rates twice and that further interest rate steps were conceivable: If the situation remains as it is, I don’t rule out the possibility of further action. That said the Governing Council’s data-driven approach of deciding on a meeting-by-meeting basis, rather than pre-committing to a given course of action, had proved its worth, Mr Nagel said. 

Securing our energy supply for the long term

Mr Nagel stressed that economic developments would increasingly be shaped by artificial intelligence. He noted that while AI could promote productivity and growth, it could also significantly increase energy needs. Europe therefore needed to make its energy supply secure, affordable and sustainable in the long term. In view of existing dependencies, That’s why we need to commit to renewable energy here, too, Nagel said.

The Bundesbank President also spoke of the need for Europe to integrate its financial markets more closely and make better use of existing growth opportunities. Innovative firms, in particular, needed easier access to financing and venture capital, he said. We need to invite venture capital to Europe, Nagel noted, pointing out that a savings and investments union was essential for this.