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Refugees will boost German economy: EU

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Refugees will boost German economy: EU
An Afghan refugee training to be a car body construction worker poses with Lower Saxony economy minister Olaf Lies. Photo: DPA
13:05 CET+01:00
The European Commission predicted that large numbers of refugees arriving in Germany will boost the economy by a significant amount over the coming years, in a new economic forecast released on Thursday.

Based on three million refugees arriving across the EU, the Commission analysis suggested that German GDP would be raised just over 0.12 percentage points in 2015, rising to 0.31 points in 2016 and 0.38 in 2017.

That figure was a net outcome factoring in government spending on refugees.

"Notwithstanding the unprecedented migration flows into the EU during this year and next, the economic impact is expected to be relatively small in the medium term," the Commission analysts wrote.

"As illustrated in the simulations for Germany, the impact may be more significant for certain countries," especially 'destination countries', they added.

Strong growth ahead

Overall, Germany is in a good economic position thanks to its labour market and the availability of cash to fund business, the Commission found, with low oil prices and government spending on refugees set to stimulate the country further.

But they specifically mentioned the Volkswagen scandal as a "downside risk" that could hit exports, along with a general slackening of demand for German products in emerging markets like China.

Germany's GDP is expected to grow by 1.7 percent in 2015, then 1.9 percent in the two following years.

And despite additional spending on refugees, the government budget is expected to remain in surplus, rising from 0.3 percent of GDP in 2014 to 0.9 percent in 2015.

By 2017, government debt is set to be almost 10 percent lower than it was in 2014, at 65.5 percent of GDP compared with 75 percent last year.

Over 750,000 refugees now in Germany

The Commission report came on the same day as Germany's Interior Ministry revealed that the country had registered 758,000 asylum applications from January to October this year.

In October alone 181,000 people formally asked for refuge, outstripping the previous record of 163,000 set in September.

Germany is expecting to receive up to one million asylum seekers this year, and the sudden surge has left local authorities scrambling to cope.

Syrians, Afghans and Iraqis topped October's arrivals while the number of migrants from Balkans states has fallen sharply compared to previous months after Berlin took a firm line against what it deems economic migrants from those countries.

Germany has also begun looking at limiting arrivals from Afghanistan, with Interior Minister Thomas de Maiziere saying last week that the rising number of asylum seekers from the war-torn country was "unacceptable".

"There is an increasing number of citizens from the middle class, also from Kabul, and we are in agreement with the Afghan government that young Afghans from middle-class families should stay in their country and rebuild it," he said.

There has even been talk of using German troops to create "safe zones" in Afghanistan to encourage people to stay in the country.

Germany recorded 31,000 Afghan asylum seekers in the month of October.

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