IMF raises Germany growth forecasts

The International Monetary Fund raised its forecast for Germany’s growth on Monday, shrugging off concerns of a slowdown in the eurozone’s largest economy.

Germany is expected to grow by 1.9 percent this year, the Washington-based body said in its annual country report, raising its previous forecast of 1.7 percent.

The stronger-than-expected expansion is also expected to spill into 2015, the IMF said, raising its prediction to 1.7 percent from 1.6 percent.

The optimistic outlook comes after a growing list of disappointing data in the European Union’s powerhouse, including weak industrial production and investor confidence figures.

Germany has been hit particularly hard by the political crisis in Ukraine and European Union sanctions against Russia, which supplies some 40 percent of its oil.

In the face of such uncertainty, the IMF urged Berlin to increase public investment to boost growth and support weak growth in the rest of the eurozone bloc.

The body in a statement “emphasized the importance of growth-enhancing policies, which would also generate positive spillovers to the rest of the euro area, preserving the role of the German economy as an anchor of regional stability”.