2010.08.1910:56:00UTC+00Bundesbank Raises 2010 German Growth Outlook On Strong Q2

Bundesbank on Thursday raised the 2010 growth outlook for Germany after the economic growth quickened in the second quarter.

In its monthly report for August, the central bank forecast 3% growth this year, much more than the 1.9% growth it had predicted in June. It noted that the pace of growth will slow in the reminder of the year, but overall economic fundamentals are strong.

Last week, official figures showed that the German economy economy expanded at a record pace of 2.2% in the second quarter following an upwardly revised 0.5% increase in the first three months of the year.

The German government expects the domestic economy to expand 1.4% this year, but an optimistic economy minister Rainer Bruederle foresee 2% expansion.

As the economy grows further, Bundesbank expects consumer prices to rise at a moderate pace. In July, inflation rate moved up to 1.2% from 0.9% in June, the Federal Statistical Office said last week. The statistical office said today that producer price inflation jumped to 3.7% in July from 1.7% in June.

Further, the bank stressed that the government must should not relax its budget deficit reducing measures in view of the strengthening economic recovery.

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