Germany raises growth expectations amid positive vibes
October 11, 2017
The German government has increased its 2017 economic growth forecast for the country to 2.0 percent, up from the 1.5 percent it had forecast in April.
The update, announced on Wednesday by the Ministry for Economic Affairs and Energy, continues the good news in what has been a week of glad tidings for Europe's largest economy.
On Monday, the same ministry revealed that Germany's industrial output increased by almost 3 percent in August, its biggest increase in six years, while on Tuesday it was announced that the country's exports had surged by 3.1 percent in the same month. The country's unemployment rate is also at a record low.
Those positive figures, coming alongside the IMF's upbeat assessment of the health of the global economy on Tuesday, have all boosted economic expectation and sentiment in Germany. The IMF also predicts the German economy to grow by 2 percent this year.
"The German economy is enjoying a steady and broad-based upswing, underpinned by a solid domestic foundation," the government said in a statement.
In terms of 2018 growth, the government has raised its forecast from 1.6 percent to 1.9 percent.
The proof is in the long term
"The economy in Germany has gained broad momentum and will continue to grow in the coming years," said Economics Minister Brigitte Zypries. "With the global economy growing, exports have picked up. This has stimulated private investment activity. Employment continues to grow strongly."
Germany's formidable industrial and exporting power means the country is likely to benefit strongly from any global uptick while its healthy domestic situation leaves it well-placed to deal with any short-term challenges.
That said, the economy faces plenty of mid- to longer-term challenges, not least with regard to digitalization and in trying to deal with the fiscal consequences of an ageing population.
There is also the prospect of growing political uncertainty, with last month's complex election result meaning months of difficult coalition negotiations are in store.