Germany’s Bundesbank raises 2014 GDP growth forecast to 1.7%

06 December 2013 17:02  [Source: ICIS news]

LONDON (ICIS)--Germany’s central bank, the Bundesbank, on Friday raised its 2014 GDP growth forecast for the country to 1.7%, from its previous projection of 1.5%.

The Bundesbank said Europe’s largest economy was on an expansion course.

The German economy is in good shape: the unemployment rate is low, employment is rising, and wage growth is returning to normal, said Bundesbank president Jens Weidmann.

These factors are supporting private consumption and driving housing construction,Weidmann said.

There should, however, also be a pick-up in exports and, in their wake, an upturn in corporate investment and imports, he added.

The bank projects German wage growth at 3.1% in 2014. This compares with a 5.5% wage hike demand for 2014 in the chemical industry by union IG BCE.

For 2015, the Bundesbank forecasts Germany’s GDP growth at 2.0%. For 2013, it expects 0.5% GDP growth.

However, in related news on Friday, Germany’s chemical employers’ trade group BAVC published a survey that showed that business in the country’s chemical industry keeps stagnating while costs are rising.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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