January 18, 2018 / 8:27 AM / a month ago

Weidmann defends Germany's record surpluses from IMF criticism

FRANKFURT, Jan 18 (Reuters) - Germany’s central banker defended his country’s record budget and current account surpluses on Thursday from criticism from the International Monetary Fund that they are hobbling growth in the euro zone and widening global economic imbalances.

Jens Weidmann said Germany needed to build a fiscal buffer to help it withstand the effect of an ageing society and that it would be “futile” for Berlin to spend more in order to try to help its neighbours.

“Raising public spending in order to reduce Germany’s current account surplus would likely be a futile undertaking,” Weidmann told a conference in Frankfurt.

He was speaking alongside Christine Lagarde, managing director of the IMF which, along with the European Commission, has for years urged Germany to increase domestic demand and imports.

Germany’s current account surplus was the world’s largest in 2017, the Munich-based Ifo economic institute said on Tuesday, and the government in Berlin is expected to post record fiscal surpluses this year and the next. (Reporting by Francesco Canepa; editing by Jason Neely)

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