German government raised slightly its forecast for economic growth this year. The revised growth of gross domestic product was forecasted at 1.8%, from 1.7% projected in the spring. However, the forecast for 2017 was reduced from 1.5% to 1.4% and for 2018 the expected growth is 1.6%. The growth of the German economy is solid, but the uncertainty increase. The global situation is still not doing well and to add the effects of Brexit, which can not be predicted in a wide range.
Despite the sluggish world economy the labor market in the country continued its positive development. In 2018 in Germany will employ 44.3 million people, which is 1.3 million more than in 2015. The number of unemployed at the same time will drop by about 160,000 to 2.63 million.
Given this development, the government expects that private consumption to remain a pillar of the upswing. Also by investments in the construction sector came strong impulses. Low interest rates, strong demand for housing and increasing public investment are the main engines of growth.
Basis for government predictions serving autumn report of the leading research institutes. They expect 2016 growth of 1.9% is expected in 2017 to slow to 1.4%. The estimates of the federal government in turn serve as the basis of the working group “Tax assessments” for its calculations. They in turn rely on the state, provinces, municipalities and social security in the preparation of their budgets.
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