BERLIN (Reuters) - Germany’s vibrant domestic demand and rising orders from abroad are boosting growth in Europe’s largest economy, the finance ministry said on Thursday, adding that Berlin expects the broad-based upswing to continue.
The German economy is enjoying a consumer-led upswing, driven by record-high employment, rising real wages, increased job security and low borrowing costs. A rebound in exports and company investments have kicked in as additional growth drivers.
“Recent economic data and business indicators are suggesting a continuation of the economic upswing at the beginning of the year,” the finance ministry said in its monthly report.
Foreign demand for German machinery and equipment is clearly picking up and the mood among manufacturers is good, the ministry said, pointing to recent sentiment surveys.
The German government expects companies to continue to create more jobs and raise wages, meaning private consumption will remain an important growth driver in 2018, it said.
“Due to the positive development of the global economy, trade will also develop dynamically and with it strengthen company investment in equipment,” the ministry said.
The German government expects the economy to grow by 2.4 percent this year. The DIHK Chambers of Industry and Commerce predict 2.7 percent growth for 2018.
Reporting by Michael Nienaber, editing by Larry King