German economy to grow between 3.4% and 3.7% this year – minister

BERLIN (Reuters) – The German economy, Europe’s largest, should grow by between 3.4% and 3.7% this year, Economy Minister Peter Altmaier said on Tuesday, offering a more upbeat outlook than when the government raised its forecast at the end of April.

“Overall, the German economy will have regained its pre-pandemic strength by the end of this year. That is a reason for optimism,” Altmaier told foreign reporters.

“We expect the German economy to grow somewhere between 3.4 and 3.7 percent this year. If things go very well, maybe a tenth or two more. And we expect it to grow by 4% next year,” he added.

At the end of April, the government raised its growth forecast to 3.5% from a previous estimate of 3%. Last year, the economy slumped some 5%, hit by restrictions to contain the COVID-19 pandemic.

Asked whether he was concerned that a rise in German consumer prices could strengthen, Altmaier said he was “watching this development with inflation very closely” but could not pass judgment on it yet.

Germany’s annual consumer price inflation accelerated in May, advancing further above the European Central Bank’s target of close to but below 2%, the Federal Statistics Office said on Monday.

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 2.4% in May, up from 2.1% in April. A Reuters forecast had pointed to a May reading of 2.5%.

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