German Government Raises Growth Projection for 2017
April 26 2017 - 9:18AM
Dow Jones News
By Nina Adam
The German government slightly raised its economic growth
projection for 2017 on Wednesday and forecast a reduction in the
country's big foreign surplus.
Europe's biggest economy is expected to expand by 1.5% this year
and 1.6% in 2018, according to Economics Minister Brigitte Zypries.
Back in January, the government projected 1.4% growth in 2017.
Ms. Zypries said the German economy remained on a solid growth
path despite global uncertainties, with robust jobs creation
supporting domestic demand.
Speaking at a media conference, she said the government has
launched a range of measures aimed at stimulating domestic demand
and imports.
Higher investment and the introduction of a minimum wage have
helped limit the country's huge current account surplus, she
added.
The U.S.'s Trump administration has criticised Germany's big
foreign surpluses, saying the country is exploiting its trading
relationships at the expense of America.
On Wednesday, Ms. Zypries signaled that a lower current account
surplus of about 4% of gross domestic product would be reasonable
for Germany.
"We will have to lower the surplus a bit more," she said.
The German government forecasts a reduction in the surplus from
8.3% in 2016 to 7.3% of GDP in 2018--which would still be high by
international standards. The U.S. Treasury targets a 3%-of-GDP rate
when it assesses the exchange-rate policies of major trade partners
in its biannual currency report.
German Chancellor Angela Merkel's conservative parties hope to
benefit from the country's strong economic track record in
elections this September.
Berlin-based think tank DIW was upbeat about Germany's growth
prospects on Wednesday, pointing to solid industrial orders
data.
"Industrial production has picked up notably since the beginning
of the year and business sentiment is extremely good," DIW
economist Ferdinand Fichtner said.
-Write to Nina Adam at nina.adam@wsj.com
(END) Dow Jones Newswires
April 26, 2017 09:03 ET (13:03 GMT)
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