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CORRECTED-Bundesbank raises growth forecasts, predicting solid upturn
December 9, 2016 / 7:37 AM / a year ago

CORRECTED-Bundesbank raises growth forecasts, predicting solid upturn

(Corrects previous projections in table)
    FRANKFURT, Dec 9 (Reuters) - The Bundesbank raised its
German growth forecast for this year and next, arguing that the
"solid upturn" was continuing, even though increasing labour
market bottlenecks could constrain growth and lead to wage
inflation.
    The German central bank raised its GDP growth projection to
1.8 percent in both 2016 and 2017 but warned that this was above
the economy's potential so the labour market bottlenecks could
intensify, exacerbated by unfavourable demographic trends such
as the ageing of the population.
    The bank added that the German budget is likely to keep
generating surpluses in the coming years without new spending
measures and the government debt to GDP ratio could fall back to
60 percent in 2019.
    The following are the Bundesbank's projections for the
German economy. Previous figures are in brackets. All figures
are percent.

                 2016        2017       2018     2019   
GDP, adjusted  1.8 (1.6)   1.8 (1.6)  1.6 (1.7)  1.5
Inflation      0.3 (0.2)   1.4 (1.5)  1.7 (1.7)  1.9

 (Reporting by Balazs Koranyi)

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