The International Monetary Fund lifted its outlook for German economy and urged authorities to boost public investment on infrastructure, while adhering to the European fiscal rules.

The Washington-based lender forecast the largest Eurozone economy to grow 1.9 percent this year, up from the prior estimate of 1.7 percent. The outlook for next year was revised to 1.7 percent from 1.6 percent.

Most Directors recommended that the authorities use available space to boost public investment in projects, especially in transport infrastructure and education.

In its Article IV consultation report, the lender also acknowledged the remarkable success in achieving low unemployment and continued efforts to promote social equality. The German banking system is downsizing but gradually strengthening, it noted.

Directors, meanwhile, highlighted the need to remain vigilant to developments in the housing market and insurance sector as monetary conditions are likely to remain accommodative for a prolonged period.

Yesterday, Germany's central bank said the Germany's second quarter GDP is likely to stall as geopolitical concerns dragged industrial production.

RTTNews