Ifo bumps up German growth forecasts
The Ifo Institute bumped up its German growth forecasts for next year as it highlighted strength in the construction and manufacturing sectors.
It now expects the German economy to grow by 2.6% next year, up from a previous forecast of 2.0%. For 2017, it raised its growth forecast to 2.3% from 1.8%, while its estimate for 2019 remains at 2.1% growth.
Ifo president Clemens Fuest said: “The impetus seen in 2017 will carry over deep into 2018."
Meanwhile, head of Business Cycle Analysis and Forecasts, Timo Wollmershaeuser, said: "Many branches, ranging from construction to manufacturing and distribution, are flourishing, which is why the ifo Business Climate Index is constantly hitting new record highs. If the number of working days had not been so low, we could have seen growth of 2.5% this year.”
Earlier, data from IHS Markit revealed that the German economy grew at the fastest rate in over six-and-a-half years in December, with the manufacturing purchasing managers' index rising to an all-time high of 63.3 from 62.5 in November. Meanwhile, the services PMI hit its highest level in the last 24 months at 55.8, up from 54.3.
The composite index, which measures activity in both sectors, jumped to 58.7 this month from 57.3 in November, hitting an 80-month high.