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The panel of economic advisers to the German government on Wednesday raised its growth forecast for the country to 2.3 per cent this year.
They raised the growth forecast despite giving a stark warning that a spiral of protectionist measures could damage the robust upswing.
The economists said they expected gross domestic product (GDP) to grow by 2.3 per cent this year, up 0.1 percentage points from their latest forecast in November, reports Reuters.
For 2019, the five economists who advise the government on economic policy have forecasted 1.8 per cent economic growth.
The panel said, “Trade will play a slightly bigger role as a growth driver than previously expected due to a booming world economy.”
They said that the European Central Bank’s loose monetary policy and the government’s plans to increase state spending will provide additional stimulus.
But the advisors also warned that the Europe’s largest economy was facing increased risks, including the Italian election result, uncertainty regarding the outcome of negotiations on Britain’s looming departure from the European Union and planned US import tariffs.
“A spiral of protectionist measures would have a clear negative impact on the global economy and the German economy,” they said.