Germany trims 2016 growth forecast

The German government cut its growth forecast for this year but insisted the economy was still “in good shape”.

In its annual economic report, the government cut its estimate for gross domestic product to 1.7% growth in 2016 from 1.8% previously, as the slowdown in emerging markets leaves Germany more dependent on domestic demand.

Still, the figure is in line with data from Destatis earlier this month showing GDP grew 1.7% last year, up from 1.6% growth in 2014 and the strongest rate in four years.

Exports in 2015 were up 5.4% compared with 4% in 2014, while imports grew 5.7% versus from 3.7%, and private consumption rose 1.9%.

Vice chancellor and economy minister Sigmar Gabriel said: “We now have to set the course for the future so that Germany can be a leading, efficient industry location also in 10 years.”

The government expects consumer spending to rise 1.9% and state spending to grow 3.5%, and reiterated its intention to keep the federal budget balanced for the third year running