The German government has lowered its growth forecast for the year, citing fallout from VW's emissions scandal and worries over China's economy. But strong domestic spending should keep things from getting worse.
Economy Minister Sigmar Gabriel said Wednesday that he expected Europe's largest economy to expand by 1.7 percent in 2015, down from a slightly rosier prediction six months ago of 1.8 percent.
A slowdown in emerging economies was largely to blame, Gabriel said before adding that larger incomes would continue to fuel more spending and remain "the main stimulus for Germany's growth."
Next year, he said, the German economy is expected to grow by 1.8 percent. Last year, it grew 1.6 percent.
Massive migrant influx
The biggest challenge facing Germany at the moment is the influx of refugees fleeing war and poverty in the Middle East, Africa and Asia, Gabriel said. But he added that Germany's economy was robust enough to integrate the new arrivals into the workforce.
"Given the coming winter, these people must be quickly given humane lodgings and be smoothly integrated into society," he said. "On this, education and training are key."
Estimates on how many refugees Germany will receive this year range between 800,000 and 1 million, placing a huge burden on local authorities to find space to house everyone.
Despite that, Gabriel said he didn't think the massive migrant influx would hurt Germany's notably low unemployment rate, which is expected to fall this year by 98,000 from 6.4 percent in September.
cjc/kms (AFP, dpa)