Germany trims down economic growth for 2017
Germany announced Wednesday a growth forecast for its economy in the current year and the next, vowing that an unprecedented flow of refugees into the West European country could be mastered.
Economy Minister Sigmar Gabriel said Berlin is penciling in an economic growth of 1.7 percent for 2016 and 1.5 percent for 2017.
Gabriel’s prognosis, however, saw almost no change in Germany’s gross domestic product (GDP) compared to the data published in January.
It is the first time that Germany releases official estimates for the next year, which could mean the country is attempting to ease concerns about the effects of refugee flow into the country. More than a million people arrived in Germany in 2015, creating fears that their presence could increase the rate of unemployment.
Gabriel admitted that there would be “challenges resulting from the influx of refugees,” including a pushed-up headline unemployment, but said that those problems can be mastered “in view of these favorable conditions.”
The German minister, who also serves as the top deputy to Chancellor Angela Merkel, said the 1.7 projection for 2016 is a continuation of the upturn recorded in 2015 when Germans experienced same level of growth.
He said the driving force behind growth is “domestic demand” and that the labor market is developing “extremely positively.”
“With employment rising sharply, tangible wage increases and stable prices, people are benefiting from the favorable economic trend,” Gabriel said.
Germany has Europe's biggest economy and has relied traditionally on exports as the main engine of growth. However, experts say that trend could decline next year as emerging economies such as China, Russia or Brazil are grappling with slowdown in the markets.
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