Bundesbank raises Germany’s economic growth forecasts

The Bundesbank has raised its forecasts for Germany’s economic growth from 0.3% to 0.5% for 2013 and from 1.5% to 1.7% for 2014.

“The German economy is in good shape: the unemployment rate is low, employment is rising, and wage growth is returning to normal,” said Bundesbank president Jens Weidmann.

Germany’s central bank makes forecasts twice a year – the last set was in June.

Jens Weidmann added that low interest rates had been encouraging house building and private consumption in Germany, although trade had been weakening.

The European Central Bank (ECB) cut its key interest rate from 0.5% to 0.25% a month ago, and kept it at that level at Thursday’s meeting.

ECB president Mario Draghi said the eurozone’s economy remained “subdued”.

The Bundesbank did not make a forecast for 2015 in June, but is now predicting growth of 2.0% for that year.