Five leading economic institutes raised their joint growth outlook for Germany on Wednesday, saying the European largest economy would expand faster than last autumn’s forecast despite external risks.

The German institutes latest outlook expects Germany’s gross domestic product (GDP) to grow 1.5 percent in 2017 and 1.8 percent in 2018.

The previous forecasts were 1.4 percent and 1.6 percent, respectively.

The economic think tanks explained that German economic growth has so far more strongly driven by the expansion of domestic consumption rather than investment and foreign trade.

They added that Germany’s jobless rate would decline to 5.7 percent this year, and further down to 5.4 percent next year.

But the institutes didn’t turn a blind eye to external uncertainties that cloud German economy. They said Brexit negotiation and possible protectionist policies by the United States posed risks on German economic outlook.

The economists also warned that a spike in inflation rate could damper consumer spending.

They predicted that Germany’s consumer prices would rise 1.8 percent this year and 1.7 percent next year, after an increase of only 0.5 percent in 2016. Enditem

Source: Xinhua/NewsGhana.com.gh