• Germany's news in English

Central bank welcomes stronger growth

AFP · 5 Jun 2015, 10:05

Published: 05 Jun 2015 10:05 GMT+02:00

Facebook Twitter Google+ reddit

The German economy, Europe's biggest, was projected to expand by 1.7 percent in 2015, 1.8 percent in 2016 and 1.5 percent in 2017, the Bundesbank said.

That marked an "appreciable" upgrade from the central bank's previous economic projections in December, when it had pencilled in growth of 1.0 percent for this year and 1.6 percent for next year.

With those growth rates, "the German economy would expand at a faster pace than potential output at an annual rate of 1.2 percent and aggregate capacity utilisation would greatly exceed the multi-year average at the end of the forecast horizon," the Bundesbank wrote.

"Compared with the December projection, GDP growth expectations for 2015 and 2016 have been raised appreciably by 0.7 and 0.2 percentage point, respectively. This is primarily a result of the changed underlying conditions, which already positively influenced the fourth quarter of 2014 and the first quarter of 2015," it said.

The German economy effectively ground to a halt in the middle of last year, but picked up again at year's end to show growth of 0.7 percent in the final quarter and expansion of 0.3 percent in the first three months of this year.

Recovered from lull

"The German economy has recovered from the lull in mid-2014 more quickly than expected and has returned to a path of growth that is supported by both internal and external demand," the Bundesbank said.

"The domestic economy is notably reaping the benefits of the favourable labour market situation and substantial income growth. This is having an effect on private consumption as well as on housing construction," it wrote.

While foreign business was currently burdened by "dampening effects emanating from the global economy ... this is balanced out by the depreciation of the euro and the improving economic recovery in the euro area," it continued.

"Moreover, the global economy is likely to pick up steam again in the near future," the Bundesbank added.

The promising overall scenario was reflected in positive sentiment, it continued.

"Enterprises still consider their situation to be exceptionally good," it said.

Story continues below…

According to the survey published by the German Chamber of Commerce and Industry (DIHK) in the early summer, nine out of 10 firms were "at least content" with their situation.

Other leading sentiment surveys, such as Ifo and the Centre for European Economic Research, painted a similar picture.

"Firms are also looking to the future with a fair amount of confidence. That said, their sense of optimism is not as pronounced as it was at the beginning of last year. According to the DIHK, sentiment is clouded by fears concerning Germany's economic policy framework, labour costs and the labour supply," the Bundesbank cautioned.

SEE ALSO: Industry: 'Doped' growth boosting economy

For more news from Germany, join us on Facebook and Twitter.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Parents who don't get nursery spot for kid entitled to pay
Photo: DPA

The Federal Court of Justice (BGH) ruled on Thursday that parents whose children don't receive placements in nursery care are entitled to compensation.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd