BERLIN: Germany’s economy will grow significantly faster this year than previously forecast, boosting the eurozone’s fragile economic recovery even as a surge in exports will increase the country’s controversial current account surplus.
Europe’s biggest economy will expand 2.1 per cent this year, compared with the 1.2 per cent projected, and 1.8 per cent in 2016, according to a survey published by the country’s leading economic institutes on Thursday.
The oil price fall and rising wages are putting money in German consumers’ pockets, while the weak euro is aiding the country’s exporters, the economists said.
However, Germany’s current account surplus will rise to 8.5 per cent of GDP from 7.8 per cent last year, again breaching the European Commission’s recommended upper threshold of 6 per cent.
Germany has attracted criticism from the US Treasury for its surplus, which reached an unprecedented level last year.
Policy makers fear the imbalance between Germany and weaker peripheral economies is destabilising for the eurozone.
Ferdinand Fichtner of DIW Berlin, one of the institutes that published the report, said criticism of Germany’s export strength was “inappropriate”.
Germany’s current account surplus would be diminished as companies invest and imports grow, he said.
