Germany raises growth forecast to 1.5% as consumers begin spending

Germany has raised its 2015 growth forecast to 1.5 per cent, matching last year's performance, as its famously finicky consumers have started a national shopping spree not seen since 2001.

German economic minister Sigmar Gabriel said lower energy prices and a weaker euro were acting like an economic stimulus programme.

“The German economy has returned to growth regardless of geopolitical turbulence,” said Mr Gabriel, leader of the Social Democratic Party (SPD).

Minimum wage

He expressed confidence the spending wave would continue after this year’s introduction of an €8.50 minimum wage and pension increase.

In October, fearing economic blow-back from the Russia-Ukraine conflict, Germany dropped its 2015 forecast from 1.8 to 1.3 per cent.

The GfK market research group yesterday published data indicating consumer confidence will rise to 9.3 points in February – the highest level since 9.6 points in November 2001.

In a statement, the GfK pointed to reduced fuel costs as a boost to disposable income among the 2,000 Germans it interview for its survey.

“German consumers have evidently been affected, too, by the major collapse in energy prices over the past few weeks,” said the GfK in a statement. “German consumers feel that their economy is currently enjoying a renewed upswing.”

A stable labour market and low inflation saw consumer economic expectations for the next months rise eight points to 22.5 points, the second successive rise.

Warning

Presenting his 2014 economic report, Mr Gabriel warned that the election of

Syriza

had triggered a “rise in uncertainty” in Europe. The SPD leader, junior coalition partner in Berlin, said it was up to EU leaders to find a balance with Athens to keep

Greece

in the euro while “being fair to our own population and other euro states”.

“If Greece wants to deviate from some [reform] measures, it must bear the cost itself rather than exporting this to other European countries via a haircut or other such ideas,” said Mr Gabriel. He said a so-called “Grexit” was the wrong solution but such a decision was up to Athens.