Germany has raised its 2010 growth forecast to 1.4 per cent from a previous estimate of 1.2 per cent, the economy Ministry said on today, boosting hopes that recovery in Europe's largest economy is gathering pace.
The government sees exports rising 5.1 per cent in 2010 and supporting the recovery in Germany, which is heavily reliant on foreign trade for economic growth and was the world's biggest exporter of goods from 2003 to 2008.
"The German economy's strength lies now as before in competitiveness, product range, and presence in the world's growth markets," economy minister Rainer Bruederle told a news conference.
Mr Bruederle said it would take two to three years for the German economy to return to 2008 levels of growth, and private consumption would only pick up in the second half of 2010.
Germany emerged from its deepest post-war recession in the second quarter of 2009 but recent data points to only a modest recovery in Europe's largest economy.
The GfK market research group said on Monday that German consumer sentiment is likely to fall going into February as worries over unemployment weigh.
Other European countries however are suffering more from the global crisis. Britain only just crept out of an 18-month recession at the end of 2009, the Office for National Statistics said on Tuesday.
Many private institutes are forecasting 2010 growth of 2 per cent for Germany. The consensus forecast made by economists polled by Reuters this month was for 1.5 per cent growth.
Mr Bruederle said that Germany had not experienced a credit crunch so far, although some medium-sized businesses were finding it increasingly difficult to borrow.
He added that the government, which faces rising state debt, would need to pursue budget consolidation from 2011.
Reuters