The administration has been trying to get people to have more children for a long time. Around the early 2000s, our birth rate was actually 1.4 children per mother, so the current 1.6-ish is already a significant improvement. This increase is usually attributed to three things:

1. "Elterngeld" (parental leave money): After a child is born, parents can take up to 14 months off and the state pays a portion of their last salary (70% afaik). Employers are required by law to accommodate parents who wish to take parental leave.

2. A few years ago, a "right to child daycare" is introduced. If you're working and want to give your child into daycare, the municipality has to offer you a place in their daycare facilities or, if they don't have enough, compensate you for lost income.

(This isn't to say that you don't have to pay for that daycare, but "free child daycare" is now a popular slogan among many political parties and some states have already implemented it afaik.)

3. Not a policy, but there is ongoing pressure from society on employers to improve the work-life balance of parents. Things like making it easier to both men and women to work part-time after a child is born etc. It's still a problem that women are low-key discriminated against, as in "We cannot promote her into an important role. What if she has a child?", and the gender pay gap is still significant, and fathers doing parental work are still looked at funny sometimes, but it's all getting better. (Frustratingly slowly.)