BERLIN (Reuters) - Germany’s economic upswing has broadened and is set to continue in the second half of the year, but it is likely to lose some momentum after its strong performance in the first six months, the Economy Ministry said on Friday.
Europe’s biggest economy is enjoying a consumer-led upswing, helped by record-high employment, moderate inflation and ultra-low borrowing costs.
“The upswing of the German economy is gaining in breadth. In addition to consumer spending and construction, exports and investment in equipment have picked up,” the ministry said in its monthly report.
Gross domestic product (GDP) grew 0.7 percent on the quarter in the first three months of the year and 0.6 percent from April to June, propelled by increased household and state spending as well as high investments in buildings and equipment.
“Indicators are pointing to a brisk continuation of the upturn in the second half of the year, although not quite with the momentum of the first half of the year,” the ministry said.
The German government on Wednesday raised its GDP growth forecast to 2.0 percent this year, up sharply from its previous estimate of 1.5 percent. It sees growth of 1.9 percent in 2018.
Adjusted for calendar effects, these figures translate into GDP growth rates of 2.2 percent in 2017 and 2.0 percent in 2018. This would be the strongest performance since 2011 when the economy expanded by 3.7 percent following the financial crisis.
Reporting by Michael Nienaber; Editing by Maria Sheahan