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OECD: Germany on positive economic trend

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OECD: Germany on positive economic trend
Photo: DPA
12:10 CET+01:00
The Organization for Economic Cooperation and Development (OECD) boosted forecasts for Germany's economic outlook on Wednesday, but still urged the need for economic reform worldwide.

The Paris-based OECD predicted in their Interim Economic Assessment on Wednesday that Germany's GDP would grow by 1.7 percent in 2015, an increase of 0.6 percent from the last outlook report in November.

Germany's GDP is also expected to expand by 2.2 percent in 2016, an increase of 0.4 percent since November.

Overall, forecasts for the economy worldwide have improved due to low oil prices and monetary easing, according to the report.

Still, the report warned that "the near-term pace of expansion remains modest, with abnormally low inflation and interest rates pointing to risks of financial instability."

“Lower oil prices and widespread monetary easing have brought the world economy to a turning point, with the potential for the acceleration of growth that has been needed in many countries,” said OECD Chief Economist Catherine Mann with the release of the report. 

“There is no room for complacency, however, as excessive reliance on monetary policy alone is building-up financial risks, while not yet reviving business investment," Mann added. "A more balanced policy approach is needed, making full use of fiscal and structural reforms, as well as monetary policy, to ensure sustainable growth and public finances over the longer term.”

The report also noted that while unemployment rates have fallen, overall employment rates remain low.

"In Germany there is now a minimum wage," Mann said at a press conference, listing German policies as an example of worldwide improvement. "But until we see more of an increase in jobs, there still remains a lot of people who are on the sidelines of this labour market."

DIW also gives economy thumbs up

The German Institute for Economic Research (DIW) says that the German economy will experience its strongest growth since 2011, reports Die Welt.

The Berlin based think tank is expecting GDP growth 2.2 percent higher than in 2014.

DIW President Marcel Fratzscher said that growth will due to “a strong job market” as well as low energy prices and the weakness of the Euro.

The DIW is calculating that this economic growth will lead to 300,000 new jobs being created throughout 2015 and a further 200,000 in 2016.

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