Germany lifts growth forecast amid pressure to spend

Germany's gross domestic product (GDP) will increase by 1.8 percent in 2016 before slowing to 1.4 percent growth in 2017 and 1.6 percent in 2018, Economy Minister Sigmar Gabriel said.

Germany lifts growth forecast amid pressure to spend

World Bulletin / News Desk

The German economy will grow faster than expected this year before slowing in 2017 and 2018, Berlin said on Friday, as pressure mounts for Europe's top economy to invest more.

The confirmation of Germany's economic strength will likely add weight to calls from EU neighbours and global finance chiefs for Berlin to boost growth in the languishing eurozone by expanding spending and investment.

Friday's latest projections lift April's forecast for 2016 by 0.1 percentage points but cut expected growth by 0.1 percentage points for next year.

Low oil prices and higher government spending to deal with Germany's refugee crisis had driven growth in 2016, Gabriel said.

"The recovery in the German economy is solid," he went on, although "the global economy is not running smoothly" and "uncertainty has increased" in the wake of Britain's June vote to quit the EU.

Gabriel, a left-winger, appeared receptive in his remarks to calls from prominent figures such as Christine Lagarde, head of the International Monetary Fund (IMF), for countries like Germany with cash on hand to invest more and drive global growth.

"We have to invest what's available in the country," he told journalists, namechecking education and the digital economy as priority areas for his Social Democratic Party.

"Our economic strength helps us to overcome the great challenges before us," he said, "whether that's giving Europe new growth prospects or managing the effects of Brexit".

Güncelleme Tarihi: 07 Ekim 2016, 16:08