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German economic optimism shows signs of recovery ahead of elections

Bundestag 2025 election campaign posters. Photo: Michael Nguyen/NurPhoto via Getty Images
Bundestag 2025 election campaign posters. Photo: Michael Nguyen/NurPhoto via Getty Images
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Germany's economic sentiment saw its strongest rise in two years just days before Sunday's national elections, where boosting growth and improving living standards are the main voter priorities.

With snap elections set for February 23, a new survey from the Leibniz Centre for European Economic Research (ZEW) showed a sharp rise in economic optimism, with the ZEW Indicator of Economic Sentiment jumping 15.7 points in February.

The ZEW Indicator of Economic Sentiment for Germany hit a seven-month high of 26.0 points in February, exceeded market expectations, and suggests there could be growing confidence in Germany's business community.

The head of the ZEW Institute, Achim Wambach, said the positive outlook likely reflects hopes for a new government to take decisive action, the Turkish new outlet, AA, reported.

Voters’ concerns


According to global polling company Gallup, economic issues have played a central role in Germany's election campaign. In 2024, only 27% of Germans said their living standards were improving, down sharply from 42% in 2023, placing them among the least optimistic populations in the European Union.

But sentiment across the eurozone has improved, boosting confidence in the economy and potentially influencing undecided voters.

Other major issues worrying German voters include the housing crisis, with nearly half of Germans dissatisfied with the availability of affordable housing, rebuilding public trust in the government, migration, and strengthening alliances in Europe.

In February, German news outlet DW reported on the key priorities of each party. The center-right CDU/CSU bloc promises tax cuts and pro-business policies, while the far-right AfD advocates strict migration controls, an EU exit, and resuming Russian gas imports.

The center-left SPD aims to boost investment through higher public debt, focusing on infrastructure. The Greens support using public debt for subsidies and welfare, though they plan to scale back climate goals. Meanwhile, the socialist Left Party calls for higher taxes on the wealthy, including a 60% inheritance tax.

According to the latest YouGov poll on Tuesday, CDU/CSU remains the frontrunner to win Sunday's elections at 27%, though it has lost two percentage points in the past week. AfD follows in second place with 20%, down one point, while Chancellor Olaf Scholz's SPD has gained a point, reaching 17%.

The Greens remain at 12%, while the Left Party rose to 9%. The business-focused Free Democrats (FDP) and the newly formed Sahra Wagenknecht Alliance (BSW) remain at 4% and 5%, respectively.
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