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German private sector grows at strongest rate in eight months

[BERLIN] Germany's private sector grew in March at its strongest rate since July, a survey showed on Tuesday, in a further sign that Europe's largest economy is gaining pace.

Markit's flash composite Purchasing Managers' Index (PMI), which tracks manufacturing and services activity accounting for more than two-thirds of the economy, jumped to a eight-month high of 55.3 from 53.8 in February.

That was comfortably above the 50 mark dividing growth from contraction for a 23nd consecutive month.

"It looks like the German economy is entering the economic fast lane again," Markit economist Oliver Kolodseike said in a statement, noting stronger domestic and foreign demand.

The German manufacturing index surged to an eight-month high of 52.4 from 51.1 in February, overshooting a Reuters poll consensus of 51.5.

The services index hit a a six-month high of 55.3, from 54.7 in February, beating a 55.0 forecast. "It's a fairly healthy looking upturn," Markit economist Chris Williamson said, predicting the German economy to grow 0.4 percent in the first quarter and around two percent in 2015.

Berlin's DIW economics institute now predicts 2.2 per cent growth in 2015 and the Paris-based Organisation for Economic Co-operation and Development has raised its outlook to 1.9 per cent The government expected 1.5 per cent, after 1.6 per cent last year.