Germany’s Chambers of Commerce and Industry (DIHK) has revised upwards its forecast for economic growth in Germany this year. DIHK’s latest survey shows business confidence further improving on hopes of higher exports.
In 2014, Germany might reach economic growth of 2 percent, the German Association of Chambers of Commerce and Industry (DIHK) said after releasing a survey of 27,000 business leaders on Tuesday.
DIHK had raised its earlier forecast of 1.7 percent growth made in autumn last year because confidence among German business leaders had improved substantially over the past few months, reaching a level not seen in two and a half years, the lobby group said.
According to the DIHK survey, a vast majority of 89 percent of German companies expected stable or increasing business in the course of 2014, up from 87 percent recorded in DIHK's autumn survey.
Current business was described by 91 percent as good or satisfactory, the survey showed. Less than 10 percent of the companies polled said their business was running badly.
In 2013, Europe's biggest economy barely managed to carve out an increase in its gross domestic product (GDP), growing by a meager 0.4 percent. The government recently forecast a rise in GDP of 1.7 percent for 2014, banking its prediction on robust domestic consumption and stronger global demand.
DIHK's data appear to support the assumption as 37 percent of German business leaders said they expected their exports to pick up over the year. Only 7 percent said they were pessimistic about a rise in exports.
As a result, a quarter of German companies want to invest more this year, while 17 percent said they were definitely going to boost hiring in 2014.
Downside risks to higher German growth cited in the survey were further rising energy and commodities prices. German business leaders expressed themselves to be especially unhappy with the country's switch to renewables, which has led to sharply rising electricity prices.
In a letter to German Chancellor Angela Merkel on Monday, DIHK President Eric Schweitzer warned that current government policies, including energy and a national minimum wage, were risking to undermine the current strength of the German economy in the years ahead.
uhe/kms (Reuters, AFP, dpa)