Germany’s economy will grow much stronger than previously expected thanks to a strong labor market and buoyant demand from abroad and at home, the government said Wednesday.
In its latest outlook report, the economics ministry raised its forecast for economic growth this year to 2.4% from 1.9%, after the economy expanded by 2.2% last year.
“The German economy is in a very good shape,” said Brigitte Zypries, Germany’s economics minister. “The strong rise in…employment last year is particularly satisfying.”
The German government forecasts export growth will accelerate by 5.3% this year from 4.7% in 2017 amid strong demand from Europe and despite a stronger euro.
Domestic demand will pick up slightly, with imports seen growing by 5.8% this year after 5.2% in 2017, a faster pace than export growth.
The government expects German private consumption to grow by 1.9% this year from 2.0% in 2017.
The labor market’s strong performance is set to continue, with the ministry forecasting 490,000 new jobs will be created in Germany this year, with the workforce reaching 44.8 million.
Germany’s unemployment rate was last at 5.7%, the lowest since the country’s reunification in 1990.
Source: Dow Jones