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Germany govt sees economy growing by 1.7% this year: report

[FRANKFURT] The German government is pencilling in economic growth of 1.7 per cent this year in a forecast scheduled to be released next week, the weekly magazine Der Spiegel reported on Friday.

That represented a fractional downward revision from Berlin's previous forecast of 1.8 per cent that it made last autumn, the magazine said.

In its annual report, to published on Wednesday, the government said growth would continue to be driven by low oil prices, the weak euro and the interest rates that are close to zero.

At the same time, the German economy, Europe's biggest, would also feel the pinch from the slowdown in developing economies such as China, the report said.

According to a preliminary estimate by Destatis earlier this month, German gross domestic product (GDP) expanded by 1.7 per cent in 2015, fractionally faster than the 1.6 per cent recorded in 2014.

At the same time, Germany clocked up a surplus on its public budget of 16.4 billion euros (S$25.6 billion), equivalent to 0.5 per cent of GDP and the second year in a row that Germany's public finances have been firmly in the black, the office said.

Eurozone countries are not allowed to run up deficits in excess of 3.0 per cent of GDP and must aim for a balanced budget for even a surplus in the longer-term.