Bundesbank says private consumption and low unemployment will sustain growth
The Bundesbank, Germany’s central bank, said that strong private consumption, rising wages and low unemployment will sustain the country’s economic growth in the near future.
Germany has suffered from a slowdown in industrial performance of late, but the Bundesbank said the country’s financial prospects will not be affected.
"The economic data for industry have disappointed for the second month in a row," the central bank said in its monthly report on Monday.
"This does not show an interruption of the upswing."
However, Germany’s monetary authority warned the economy will grow at a slower pace than previously thought, adding that private consumption was crucial to ensure the expansion remained steady in the future.
"The exceptionally good environment for consumption, based on a pleasing situation in the labour market and strong real wage growth, points to this development holding for some time," the bank said.
The Bundesbank said that protracted low unemployment meant the country may be in a position where it would be "financially manageable" for it to reduce its 3% charge on workers for unemployment benefit.