BERLIN: Germany's moderate economic upswing should continue despite rising risks linked to a cooling in emerging markets, as robust private consumption remains the key growth driver of Europe's largest economy, the Finance Ministry said on Friday.
In its monthly report for November, the ministry said record employment, rising wages, low interest rates and cheaper energy were boosting Germans' purchasing power, adding that the mood among company managers had recently improved.
"The overall conditions in Germany for economic activities of companies and consumers remain good so that the moderate economic upswing is likely to continue," it said.
The ministry said exporters' growth prospects in China and other emerging markets were muted, but stronger demand from the United States and European economies was helping to compensate.
"Demand from the United States and Britain is likely to remain strong despite the Volkswagen emissions scandal," said Berenberg chief economist Holger Schmieding.
On Thursday, data showed German exports to the United States and Britain surged in the first three quarters, helping companies to shrug off waning demand from China and Russia.
Schmieding said emerging markets were likely to stabilise next year. "I expect demand from China to pick up slightly in 2016," he said.
The German economy grew 0.3 percent in the third quarter after expanding 0.4 percent in the prior three months, with net foreign trade being a drag in the July-September period while private and public consumption both increased.
The government predicts economic growth rates of 1.7 percent for this year and 1.8 percent next year due to strong private consumption and higher state spending on refugees.
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