BERLIN: The Bundesbank increased its forecasts for German economic growth this year and next as record-low unemployment and a recovering euro area boost consumption.
The upbeat assessment came as data showed factory orders climbed for a second month in April, rising a better-than-forecast 1.4 percent. The German central bank sees gross domestic product increasing 1.7 percent in 2015 and 1.8 percent in 2016. That compares with December predictions of 1 percent and 1.6 percent, respectively.
Germany, Europe’s largest economy, is benefiting from rising job creation and a euro area that is being revived by European Central Bank stimulus and lower oil prices. The manufacturing report showed that orders from the 19-nation currency bloc surged 6.8 percent in April.
“These are the first signs that the improvement in business sentiment in the euro zone translated into higher demand and arrived in Germany,” said Andreas Rees, an economist at UniCredit SpA in Frankfurt. The region is “still the bread-and-butter business for German companies,” he said.
The euro rose 0.1 percent to $1.1254 at 12:11 p.m. Frankfurt time. The DAX Index of German stocks dropped 1.4 percent.
