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BERLIN, Oct. 14 (Xinhua) -- The German government sharply cut its forecast for German economic growth on Tuesday, blaming geopolitical crises and moderate global growth.
In its autumn forecast, the German government expected the gross domestic product (GDP) to grow by 1.2 percent this year and by 1.3 percent in 2015. Both were significantly lower than the government's spring forecast of 1.8 percent and 2.0 percent respectively.
German Economy and Energy Minister Sigmar Gabriel attributed the adjustment to crises abroad Kai Forbath Jersey , as well as the weak performance of the global economy.
"The German economy is sailing in difficult foreign economic waters," he said in a press conference in Berlin, adding that geopolitical crises have brought uncertainties to Germany, while moderate global growth has dragged the German economy downward.
Both domestic and foreign demand were expected to increase less than the government's previous forecast.
Exports were predicted to grow by 3.4 percent this year and by 4.1 percent next year Nick Easton Jersey , while imports would rise by 4 percent and 5.5 percent. Foreign trade thus would make a negative contribution to economic expansion (minus 0.1 percent in 2014) and would positively contribute to the growth by 0.3 percent in 2015.
Meanwhile, consumption was anticipated to grow by 1.0 percent in 2014 and 1.4 percent in 2015, instead of 1.5 percent and 1.7 percent respectively as previously forecast.
Gabriel insisted that Germany's domestic economy remained intact due to a robust labor market. Increasing employment and wages stimulate personal consumption, he said. Once the international environment was on the mend Ryan Quigley Jersey , the German economy would be back on "a solid growth path."
The government estimated that 325,000 more people would be employed this year. This figure was foreseen to grow by a further 170,000 in 2015 to reach a total of 42.8 million.
Disposable income was judged to increase by 2.2 percent in 2014 and by 2.9 percent in 2015, thanks to increasing wages and salaries.
Gabriel admitted that Germany must invest more in infrastructure and improve the economic environment to make it favorable for private investment Mike Remmers Jersey , as "investment plays a key role in long-term growth and prosperity." He said the government would remain focused on investing in Germany's ambitious energy transition and expansion of broadband coverage.
Despite being the largest economy in the eurozone and "the engine of Europe," Germany failed to lead the group to recov. |
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