German gov't keeps 2016 growth forecast at 1.7 percent

The German government kept its 2016 growth forecast at 1.7 percent on Wednesday, unchanged from its earlier prediction, saying that strong domestic economy would offset losses in exports.

Following a 1.7 percent growth in 2015, the German economy would expand at the same rate this year, said the German Federal Economy Ministry. In 2017, the economy would grow by 1.5 percent, the ministry said.

"The upturn in the German economy will continue this year and next," said German Economy Minister Sigmar Gabriel.

According to the ministry, private consumption in Germany would increase by 2 percent in 2016 after 1.9 percent in 2015, and by 1.5 percent in 2017.

Government spending was expected to grow by 3.8 percent this year and by 2.2 percent in the next, while investment would rise by 2.6 percent and 2.7 percent in 2016 and 2017 respectively.

Foreign trade, however, would make negative contributions to the economic growth in the two years, said the ministry, as imports would grow faster than exports.

"The domestic growth forces have gained in importance," Gabriel said, adding that favorable labour market, increasing wages and stable prices would continue to benefit the Europe's biggest economy.

The government expected total employment to reach a record high of 43.5 million in 2016 and further increase to 43.9 million in 2017.

"Under these favorable conditions, I am confident to master the challenges resulted from refugee migration," Gabriel said. Endit