Germany's Bundesbank has raised expectations for the growth of the German economy, pointing out that the economy will continue to enjoy export-based prosperity. The bank said the economy could grow by 2.5% next year, higher than the 1.7% forecast for June, while the economy could grow by 1.7% in 2019, higher than the previous forecast of 1.6%.
The German economy is growing strongly, driven by strong foreign demand, industry growth and continued sharp rise in business investment. The bank added that this strong growth has reached an increasingly mature state, which means that the pace of growth is likely to slow over the medium term."
The Bank also predicted that export growth would be further weakened, particularly due to capacity constraints and labor shortages. Also, the bank raised its inflation forecast for 2018 but reduced it for 2019, indicating that the ECB will fight to meet the inflation target of just under 2%.
The following are the German central bank forecasts:
- Inflation expectations for 2019 up to 1.9%.
- German growth is expected to continue to rise.
- GDP is expected to grow by 2.5% in 2018 from a previous forecast of 1.7%.
- GDP is expected to grow by 1.7% in 2019 from a previous forecast of 1.6%.
- Inflation is expected to rise by 1.6% in 2018 from a previous forecast of 1.4%.
- Inflation is expected to rise by 1.7% in 2019 from a previous forecast of 1.8%.
