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German government advisers trim economic growth forecast | German government advisers trim economic growth forecast |
(about 1 hour later) | |
BERLIN — The German government’s independent panel of economic advisers has trimmed its growth forecast for this year to 1.5 percent, pointing Wednesday to growing risks to exports. | |
The forecast compared with the panel’s 1.6 percent forecast made in November for growth in Europe’s biggest economy. For 2017, it is predicting growth of 1.6 percent. | |
The revision is “due to somewhat weaker external demand,” the economists said in a statement. | |
They identified global economic risks including “the potential for a more pronounced economic slowdown in China and other emerging markets,” financial market turmoil, “increased geopolitical conflict,” a flare-up of the euro crisis and Britain’s referendum on whether to stay in the European Union. | |
However, they also said there is potential for stronger-than-expected growth in “Anglo-Saxon countries.” | |
The German economy, Europe’s biggest, grew by 1.7 percent last year. It is traditionally export-heavy but lately has been fueled increasingly by domestic demand. | |
The government itself is forecasting growth of 1.7 percent this year. That prediction dates back to late January. | |
The economy’s solid performance has boosted the government’s tax income and allowed it to run a surplus at a time when other countries in Europe have sizeable deficits. | |
On Wednesday, Chancellor Angela Merkel’s Cabinet approved a budget plan that foresees new borrowing remaining at zero through 2020. It calls for spending to increase to 325.5 billion euros ($365.5 billion) in 2017 from 316.9 billion euros this year, a 2.7 percent rise. | |
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. | Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |
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