Germany's DIHK Raises 2014 Growth Forecast To 2%

(RTTNews) - The German economy is set to expand at a faster pace this year than estimated earlier, supported mainly by the improving trend in external demand, the country's Chamber of Commerce (DIHK) said Tuesday.

The agency expects gross domestic product to grow 2 percent this year, which has been revised up from the 1.7 percent growth forecast earlier.

Exports are expected to grow sharply by 4.5 percent in 2014, which marks a major improvement from last year's growth rate of 0.6 percent. But strong imports, projected to grow 5.5 percent, are seen offsetting the input from exports.

The ongoing improvement in external demand and pick up in investment would push up employment by around 250,000 this year, while the annual average unemployment is seen falling to 2.9 million, DIHK said.

The report was published on the basis of results of a survey of around 27,000 corporates in the German private sector.

Yesterday, the PMI survey for the German manufacturing sector showed that the activity indicator climbed to a 32-month high of 56.5 in January from 54.3 in December, boosted by strong output and new order growth.