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German government raises 2015 growth forecast to 1.5%

Tuesday, January 27, 2015 - 22:52

[BERLIN] The German government is forecasting economic growth of 1.5 per cent this year, higher than originally expected, according to the economy ministry's annual report obtained by AFP on Tuesday.

Initially, the government had been pencilling in gross domestic product (GDP) growth of 1.3 per cent for this year after it expanded by 1.5 per cent in 2014.

"For 2015, the government is projecting an annual average increase in GDP of 1.5 per cent," according to the report, which the ministry is officially scheduled to publish on Wednesday.

Growth will gather momentum as the year progresses, and by the end of the year it will be stronger than it was at the end of 2014, the ministry said.

Last year, the German economy, Europe's biggest, enjoyed strong growth in the first quarter but suffered a sharp slowdown in subsequent quarters.

"Investment momentum, in particular, fell short of expectations due to disappointing global growth and increased geo-political risks," the ministry said.

"In the last few months of last year, however, recovery kicked in, powered largely by a robust labour market and strong consumer spending," the report said.

Rising business confidence also reflected this, it added.

AFP