FRANKFURT: The German economy, Europe's biggest, has slipped into higher gear powered by low unemployment, higher wages and the weak euro, the German central bank, or Bundesbank, said on Friday.
After notching up growth of 1.6 percent last year, Germany would see gross domestic product (GDP) expand by 1.7 percent in 2015, 1.8 percent in 2016 and 1.5 percent in 2017, the Bundesbank said in its latest monthly report.
That marked an "appreciable" upgrade from the central bank's previous economic projections in December, when it had pencilled in growth of 1.0 percent for this year and 1.6 percent for next year.
With those growth rates, "the German economy would expand at a faster pace than potential output at an annual rate of 1.2 percent," the Bundesbank wrote.
"Compared with the December projection, GDP growth expectations for 2015 and 2016 have been raised appreciably by 0.7 and 0.2 percentage point, respectively," it said.
The German economy effectively ground to a halt in the middle of last year, but picked up again at year's end to show growth of 0.7 percent in the final quarter and expansion of 0.3 percent in the first three months of this year.
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