Germany Lifts Growth Forecast Amid Pressure To Spend More

FRANKFURT, (UrduPoint / Pakistan Point News - 07th Oct, 2016 ) : The German economy will grow faster than expected in 2016 before slowing in 2017 and 2018, Berlin said on Friday, as pressure mounts for Europe's top economy to invest more.

Germany's gross domestic product (GDP) will increase by 1.8 percent in 2016 before slowing to 1.4 percent growth in 2017 and 1.6 percent in 2018, Economy Minister Sigmar Gabriel said. Low oil prices and increased government spending to deal with Germany's refugee crisis had driven growth in 2016, he added.

"The recovery in the German economy is solid," Gabriel said, although "the global economy is not running smoothly" and "uncertainty has increased" in the wake of Britain's June vote to quit the EU.

Friday's latest projections boost April's forecast for 2016 by 0.1 percentage points but cut expected growth by 0.1 percentage points for next year. Gabriel, a left-winger, appeared receptive in his remarks to calls from prominent figures such as Christine Lagarde, head of the International Monetary Fund (IMF), for countries like Germany with cash on hand to invest more and drive global growth.

"Our economic strength helps us to overcome the great challenges before us," he said, "whether that's giving Europe new growth prospects or managing the effects of Brexit".