The Bundesbank raised its 2012 GDP growth forecast to 1.0% from 0.6% in June partly on the expectation of strong domestic consumption. With government spending set near 2011’s level, the bank is counting on the German consumer as a driver of growth, even though household consumption growth increased only marginally in the first quarter of 2012.

ECRI’s latest analysis clarifies if the German consumer will indeed be able to fuel German growth, as the Bundesbank expects, or leave the bank wanting.