“The growth will, over the whole year, probably be in the range of 2.5 percent,” IWH forecaster Udo Ludwig told daily Berliner Zeitung.
The Institut für Wirtschaftsforschung Halle had previously assumed growth of about 2 percent. Other forecasters have also been revising their predictions upwards for the year – mainly on the back of booming exports – but the IWH tip is the rosiest yet from a major economic institute.
“I think one can be even more optimistic for this year, given the business rebound of the past months,” Ludwig said.
He said Germany’s surprisingly strong performance amid the lingering worldwide crisis could be largely explained by the fact that it had “profited from the strong sales to developing countries such as China, India, Brazil and also Russia.”
In mid-July, Economy Minister Rainer Brüderle also confirmed that growth would probably be stronger this year than previously thought. The government had predicted a 1.4 percent expansion this year, but Brüderle said he was certain it would be higher than that.
The government will release its second quarter growth figures on Friday. Trade figures released on Monday showed that exports rocketed 28.5 percent to €86.5 billion in June from the same month a year earlier, sparking excitement among economists.
“This has improved chances of the German economy having grown more rapidly in the second quarter than previously assumed,” Commerzbank analyst Simon Junker told news agency AFP.
ING senior economist Carsten Brzeski said: “The German economy is bound to see its strongest quarterly growth rate since reunification.”