Germany to raise growth forecasts next week: sources

[April 18, 2015] BERLIN (Reuters) - The German government is on the verge of raising its growth forecasts for this year and next, but its new projections will be more conservative than those published by leading economic institutes earlier this week, two government sources told Reuters.

The institutes are calling for growth of 2.1 percent in 2015 and 1.8 percent in 2016.

"This is too high," one of the sources said, making clear that the government would take a more cautious view. Berlin is currently forecasting growth of 1.5 percent this year and of 1.6 percent in 2016.

Although exports are no longer providing the robust support for German growth that they once did, private consumption has picked up in the face of record-low unemployment and generous wage deals.

The government has also made boosting private investment a priority after years of weakness. Economy Minister Sigmar Gabriel is due to present the results of an expert commission on this subject on Tuesday.

German gross domestic product (GDP) grew by 0.7 percent quarter-on-quarter in the last three months of 2014 and the institutes are expecting growth of 0.6 percent in the first quarter of this year.

(Reporting by Gernot Heller; Writing by Noah Barkin Editing by Jeremy Gaunt)

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