The key facts

  • Merz stated that Germany is the only G7 country with an AAA rating and intends to preserve this status
  • The Council of Economic Experts raised its economic growth forecast to 1.3%
  • The government plans to cut subsidies, save on personnel, and reform the pension system, with a cabinet decision due by the end of the year

Merz pledged to preserve the AAA rating

German Chancellor Friedrich Merz stated that he intends to preserve the country's status as the only developed economy with a AAA credit rating and to ensure the sustainability of public finances through savings and reforms. 'Germany is the only country in the G7 that still has a triple A. I want it to stay that way,' he said after receiving the annual report of the Council of Economic Experts. According to him, he fully agrees with his cabinet colleagues that everything must be done to preserve the rating. The G7 unites the USA, the United Kingdom, France, Germany, Italy, Canada, and Japan.

Growth forecast raised to 1.3%

Merz welcomed the Council of Economic Experts' raising of the economic growth forecast to 1.3%. In the chancellor's assessment, the economy is slowly improving again, and, given the many crises in Germany, such a result 'did not necessarily have to be expected.' The upturn, as noted in the report, should continue into the next year as well, which gives encouraging signals for companies and private households across the country.

Savings and pension reform

In the fiscal part of the report, Merz stated that the government shares the call for a sustainable budget policy and stable public finances, although at the same time it faces a number of tasks that also require funding. The chancellor promised to continue cutting subsidies and financial assistance, as well as savings on personnel. 'This also includes structural reforms in the social security systems. We especially want to put pension insurance on a new concept and want to make a decision on this in the cabinet of ministers within this year,' he emphasized. Merz named competitiveness and growth as the government's priorities, referring to the special fund for infrastructure and climate neutrality, the growth of spending on the armed forces, and the modernization of infrastructure. The experts' more optimistic forecast, in his words, strengthens the government on this path.