German economy remains solid despite global weakness: finance ministry

October 20, 2016 6:04 PM EDT

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BERLIN (Reuters) - The German economy should remain on a solid footing in 2016 despite weakness in the global economy, the finance ministry said in its monthly report on Friday, adding that it expects a slight growth in exports over the rest of the year.

It said low interest rates, a robust job market and rising wages were contributing to a moderate upswing, which prompted the government this month to lift its 2016 growth forecast to 1.8 percent from 1.7 percent previously, which would be the strongest expansion rate in half a decade.

Those factors have made private consumption the main growth drivers in an economy that has traditionally relied on exports for growth. This should remain the case in the second half of the year, the ministry said.

The ministry said industrial production was weak in the third quarter and would provide only a small boost for the economy in the second half of the year.

"The economic upswing will be supported by the domestic economy," it said, adding that the health care and construction sectors would be the main growth drivers in the second half.

Leading economic institutes are even predicting a growth rate of 1.9 percent this year.

(Reporting by Joseph Nasr; Editing by Victoria Bryan/Jeremy Gaunt)



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