Germany to raise 2015 growth forecast amid record-high employment, strong consumer spending
BERLIN—Germany raised its forecast for economic growth for this year on the back of record high employment levels and strong consumption, which gets a lift from lower oil prices.
The economics ministry increased its forecast for economic growth this year to 1.5% from an earlier forecast of 1.3%, according to its annual report. The economy grew by 1.5% last year.
“The German economy has return to a growth path despite the geopolitical turbulences in the past year,” Sigmar Gabriel, minister for economics and energy, said in a statement on Wednesday. “The government expects that the [introduction of a national] minimum wage as well as the rise and expansion of state pension payments will boost consumer demand.”
The higher forecast was widely expected because analysts think the slide of both oil prices and the euro will give a growth stimulus to Europe’s largest economy. What’s more, Germany’s labor market has continued to boom over the past months, resulting in higher-than-expected tax revenues that helped the government to balance its federal budget last year, one year earlier than planned.
