BERLIN: The German government is penciling in economic growth of 1.7 percent for the current year and 1.5 percent next year, economy minister Sigmar Gabriel said on Wednesday.
The forecast for growth of Germany’s gross domestic product (GDP) is therefore unchanged from an earlier prognosis published in January, but it is the first time that Berlin has released a prediction for next year.
After Europe’s biggest economy notched up growth of 1.7 percent in 2015, “the upturn . . . will continue both this year and next year,” Gabriel said. “Domestic demand is increasingly important as the driving force” behind growth.
The labor market is developing “extremely positively”, the minister said.
“With employment rising sharply, tangible wage increases and stable prices, people are benefiting from the favorable economic trend,” he continued.
“In view of these favorable conditions, I am confident that the challenges resulting from the influx of refugees can be mastered.”
More than one million asylum seekers arrived in Germany last year and their numbers could push up headline unemployment next year once people who have been assigned refugee status register as looking for work, the economy ministry said.
In the past, exports have traditionally been the main engine of growth for the German economy, but they could decline next year, pulled down by the slowdown in emerging economies such as China, Russia or Brazil.