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Bundesbank raises German growth forecasts, GDP to grow 1.8%

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Staff Writer | December 9, 2016
Germany's economy is continuing its solid upturn, the Bundesbank said, raising the growth forecasts for this year and next.
Germany   The highly favorable setting
Gross domestic product is set to grow 1.8 percent this year, which was slightly faster than the 1.7 percent expansion predicted in June, the bank said in its semi-annual economic projection.

Growth will continue at 1.8 percent next year, which was much stronger than 1.4 percent seen in June. The bank retained the projection for 2018 at 1.6 percent and predicted 1.5 percent expansion for 2019.

The highly favorable setting for household consumption at present looks set to turn slightly gloomy in the years ahead as demographic constraints soften employment growth and higher rates of inflation, mainly led by energy prices, erode consumers' purchasing power, the bank said.

Exports are likely to continue to be held back by muted growth in global trade next year, but should slowly gather steam as the markets for German exports improve, the bank added.