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German economy to grow strongly despite Brexit uncertainty: central bank

Xinhua, July 19, 2016 Adjust font size:

The German economy would grow strongly in the third quarter this year despite risks resulting from Britain's decision to leave the European Union, said German central bank on Monday.

"It is currently difficult to estimate effects of Brexit on the German economy, but it could remain limited, at least in the short term," said the Bundesbank in its monthly report, forecasting that the German economy would grow strongly in coming months following a slowdown in the second quarter.

"The underlying trend is still quite strong, and a significant increase in economic output can be expected for the summer quarter," it said.

According to the central bank, the driving factors of domestically supported upswing, including the excellent labor market, rising real wages and an expansionary fiscal policy, remain intact.

"The continued favorable business and household sentiment suggests a purely temporary breather in the second quarter," it said.

Europe's biggest economy grew by 0.7 percent in the first quarter of 2016. Economists expected the growth to have slowed in the second quarter. Endit