Merz Targets 1% German Growth in 2027 as Cabinet Pushes AI and Investment

German Chancellor Friedrich Merz said the government is aiming for economic growth of at least 1% in 2027 after three years of recession, estimating that rate would add nearly €50 billion in output. Finance Minister Lars Klingbeil said research and development investment from the special fund will rise 60% next year, supporting German AI and chip development. He said about €50 billion of the €500 billion, 12-year infrastructure fund has already been committed. The cabinet also plans income-tax relief worth about €600 annually for a family with two children and EU proposals on China trade imbalances in October.