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The German economy is heading towards recovery with the country seeing an upwards tendency in the early spring months, a leading research institute said Thursday. The economic research body CESifo Group now expects gross domestic product in Germany to increase by +0.8% this year and by +1.9% next year.
“The situation in the financial markets has eased thanks to subsiding uncertainty regarding the future of the European Monetary Union. The headwind in the world economy has also tailed off somewhat,” the institute said.
It also expects unemployment to fall in 2013. The latest forecasts expect the number of unemployed to drop to an annual average of 2.9 million this year and to 2.7 million in 2014. Employment levels are also projected to grow to 41.9 million in 2013 to 42.1 million next year.
“The labour market in Germany remains robust,” CESifo said. “There are virtually no traces of the recent economic downturn in this market. This means that income expectations remain stable, which should support consumer spending.”
Business and consumer confidence have improved, it said, but the organisation warned of disruptions in the private sector across global markets.