German government projects growth forecast of 1.8% in 2014

German maintained its forecast for the growth of economy of 1.8 percent in 2014, and 2 percent in 2015, German Economics Ministry said on Tuesday. "The German economy is in a solid upswing, two economically successful year lie in front of Germany," said German Economic Minister Sigmar Gabriel in a statement, adding that strong domestic economy would be the main driving force for the growth. As in its previous projection in February, the Economic Ministry forecasted domestic demand to grow by 1.9 percent in 2014, and by 2.1 percent in 2015. Stable labour market, increasing private households' income, positive mood of enterprises and rising investment would form a broad basis for the growth, it said. Thanks to favorable financing conditions and improving sales prospect, gross fixed investment was expected to climb by 4.1 percent in 2014 and by 4.7 percent in 2015. Household consumption would grew by 1.5 percent this year and by 1.7 percent in the next due to stable labour market, increasing wages and moderate price levels, the ministry said. It said exports would expand by 4.1 percent in the current year against the backdrop of a recovery of global economy, especially of the bright perspective of the euro area, which is Germany's biggest trading partner. In 2015, exports were expected to increase by 4.6 percent. Imports, however, would grow faster than exports with a growth rate of 4.7 percent in 2014 and 5.1 percent in 2015, helping narrow Germany's controversial huge trade surplus. Overall, foreign trade would not contribute to the economic expansion this year, and would only add 0.1 percentage points in the next. Suffered from recession in its European neighbors and restrained growth of the global economy, Germany's economic output grew slightly by 0.4 percent in 2013, following an expansion of 0.7 percent in 2012, and a more dynamic growth of 3.3 percent in 2011. Earlier this month, four leading institutes in Germany raised their forecast for German economic growth to 1.9 percent this year, and 2.0 percent in 2015. They also regarded domestic consumption and investment as main driving forces of the growth.