World Economy

Bundesbank Says Consumption Will Fuel Economic Upswing

Bundesbank Says Consumption Will Fuel Economic UpswingBundesbank Says Consumption Will Fuel Economic Upswing

Strong private consumption backed by low unemployment and rising wages will sustain Germany’s economic upswing for some time to come, despite slower recent industrial performance, Germany’s Bundesbank said on Monday.

“The economic data for industry have disappointed for the second month in a row,” the central bank said in its monthly report. “This does not show an interruption of the upswing,” Reuters reported.

It said, however, that the underlying pace of growth is likely lower now than the headline fourth-quarter growth figure of 0.7 percent suggested it was between October and December.

Private consumption would continue to provide the mainstay for strong growth ahead, the central bank said.

“The exceptionally good environment for consumption, based on a pleasing situation in the labor market and strong real wage growth, points to this development holding for some time.”

The Bundesbank said that low unemployment, if it continues, would mean that it could be “financially manageable” for the country to further reduce its 3 percent charge on workers for unemployment benefit.