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German business ups growth forecast

German economy - 'Even consumption accelerating'
German economy - 'Even consumption accelerating'

Final figures confirm that the German economy grew by 2.2% in the second quarter from the previous three-month period.

The country's national statistics office confirmed its previous estimate for Europe's biggest economy, which also showed an annual growth rate of 4.1%.

The quarterly growth rate was the strongest since east and west Germany were reunified in late 1990. Growth in Germany contrasts with a loss of momentum in the United States, the world's biggest economy, and a slowdown in number two China.

In October, the federal government is to revise its previous 2010 forecast of 1.4% growth, officials have indicated.

The German Chamber of Commerce and Industry (DIHK) now expects the country's economy to grow by 3.4% this year, its chief Martin Wansleben said today. 'The recovery is expanding,' he told the weekly magazine Der Spiegel.

Businesses are investing again and 'even consumption is accelerating thanks to favourable developments in the labour market,' he added.

The DIHK forecast is considerably higher than the revised 3% forecast issued on Thursday by the German central bank, and would see the economy tie the growth record it set in 2006.

Germany suffered its worst post-war recession last year, but has bounced back with the help of strong foreign demand for its high quality cars, chemical products and machine tools.