Germany's economic upswing likely to continue, says finance ministry

A clothing store in Bonn, Germany, on Feb 26, 2015.
A clothing store in Bonn, Germany, on Feb 26, 2015. PHOTO: BLOOMBERG

BERLIN (REUTERS) - Germany's moderate economic upswing is likely to continue despite rising risks linked to a cooling in emerging markets as robust private consumption remains the key growth driver of Europe's largest economy, the Finance Ministry said on Friday (Nov 20).

In its November monthly report, the ministry said record employment, rising wages, low interest rates and cheaper energy prices were boosting Germans' purchasing power, adding that the mood among company managers had recently improved.

"The overall conditions in Germany for economic activities of companies and consumers remain good so that the moderate economic upswing is likely to continue," it said.

The ministry added that growth prospects for exporters in emerging markets were muted, but stronger demand from the United States and other euro zone economies helped compensate.

Recent data showed German exports to the United States and Britain surged in the first three quarters, helping companies to shrug off waning demand from China and Russia.

The German economy grew 0.3 per cent in the third quarter after expanding 0.4 per cent in the prior three months with net foreign trade being a drag while private and public consumption both increased.

The government expects strong private consumption and higher state spending on refugees to drive economic growth to 1.7 per cent this year and 1.8 per cent next.