German government ups 2014 growth forecast
2013-10-23 17:05:37
The German government on Wednesday raised the economic growth forecast for 2014 as it expects exports and investment to increase.
Gross domestic product is likely to grow 1.7 percent next year, the Economy Ministry said in its autumn forecast, which was slightly better than the 1.6 percent expansion seen in April's spring forecast. The growth outlook for 2013 was maintained at 0.5 percent.
"The German economy is on a solid growth path," outgoing economics minister Philipp Roesler said, citing better economic sentiment, improved investment, rising employment and private consumption.
Economic momentum will accelerate significantly next year, led by domestic forces, the minister said.
The uncertainty due to the euro area debt crisis has subsided, the ministry said. However, the global economic environment remains fragile and the growth outlook for major markets, especially emerging markets, are subdued, it said.
The government expects exports to grow just 0.3 percent this year. The figure is forecast to improve to 3.8 percent next year. Contribution of net exports to GDP growth will be negative in both 2013 and 2014, the ministry said.
Imports are forecast to grow 1.1 percent this year and 4.5 percent in 2014.
Investment in machinery is expected to grow a solid 4.6 percent next year, after a 1.6 percent decline this year. Construction sector investment is forecast to rise strongly with 4.2 percent growth next year, after a 0.2 percent gain in 2013.
Private consumption is seen rising 1.2 percent in 2014, following a 0.8 percent increase this year. Domestic demand is expected to grow 0.8 percent this year and 1.9 percent in 2014.
Inflation is forecast at 1.5 percent for this year and 1.8 percent next year.
Unemployment is expected to rise slightly this year and reach around 2.95 million. However, the figure is expected to decline to 2.93 million in 2014. The jobless rate is seen at 6.8 percent next year.