BERLIN- The German government expects the country’s economy to grow 1.3 percent in 2021, coalition and government sources said.
On Monday, sources familiar with the figure said the government expects the economy to grow 1.1 percent this year, up from a previous estimate of 1.0 percent.
Asked about this year’s growth forecast, a spokeswoman for the Economy Ministry on Monday declined to comment and pointed instead to the upcoming publication of the government’s annual economic report.
Europe’s biggest economy narrowly dodged recession last year, and the Ifo institute’s monthly survey on Monday showed business morale weakening, suggesting the economy got off to a slow start in 2020.
Ifo economist Klaus Wohlrabe said the German economy was likely to grow by 0.2 percent in the January to March period after expanding by 0.1 percent in the fourth quarter as the industrial sector slowly emerges from a crisis.
Meanwhile, German consumer morale unexpectedly rose heading into February, the GfK market research group said on Wednesday, suggesting that a partial agreement reached in the US-Sino trade conflict is putting German buyers at ease.
The GfK consumer sentiment indicator, based on a survey of some 2,000 Germans, rose to 9.9 points in January, from a revised 9.7 a month earlier. This confounded a Reuters Poll of analysts of 9.6.
GfK researcher Rolf Buerkl said a first deal in the trade dispute between the United States and China provided relief in Germany as an export nation dependent on a free exchange of goods.
Washington and Beijing earlier this month reached a truce in their 18-month trade war, which had slowed global economic growth and increased business uncertainty.
GfK’s sub-indicator for business expectations rose slightly but remained negative at -3.7 points.
A stronger propensity to buy, stable employment and bright income expectations helped for the more cheerful mood among German consumers, GfK said.
Saving instead of consumption remains unattractive among Germans with the European Central Bank’s low interest rate policy which has been pushing some banks to impose punitive interest rates on private investors, GfK added.
For 2020 as a whole, GfK forecast a 1 percent real growth in private consumer spending in Germany.
“The positive start of the consumer climate in 2020 confirms our assessment that private consumption will continue to be an important pillar of the German economy this year,” Buerkl said.
GfK survey was conducted from Jan. 8 to Jan 20, 2020. — Reuters
