Germany's central bank has raised its forecast for German growth this year and next as the biggest economy in Europe cashes in on gradual global recovery.
The Bundesbank said in its twice-yearly outlook that it expected German gross domestic product (GDP) to expand 1.9% in 2010, instead of the 1.6% it had expected in December.
Next year, the economy is seen as growing 1.4%, against the 1.2% previously estimated.
The Bundesbank said exports would be one of the main factors in growth. 'In the medium term, business investment will pick up, and private consumption, too, is likely to increase again,' it added.
The Bundesbank said that it saw the risk to German economic growth posed by fears over other euro zone countries defaulting on loans as 'limited', though this depended on credible measures being taken to deal with budget deficits.
'Apart from that, it is conceivable that the German economy could benefit from the global recovery to a greater extent than is assumed here,' the bank said.
