Merkel Targets Debt Reduction, Investment

Chancellor Angela Merkel said Germany would reduce government debt and invest in employment and infrastructure to extend the economy’s upswing and prepare for any downturn, Reuters reported. In her regular weekly podcast Saturday, Merkel said the government would use its 2019 budget—due to be debated in parliament next week—to invest in helping the long-term unemployed get back to work with a view to achieving full employment by 2025. Europe’s largest economy is enjoying a sustained period of growth and unemployment is running at 5.2%. This week, the Ifo economic institute raised its 2018 growth forecast for Germany to 1.9% from 1.8% previously, citing better-than-expected performance in the first half of the year. Yet economic data this week pointed to industry taking a hit from US President Donald Trump’s protectionist trade policies. Merkel, citing “very good tax revenue” this year, said her government planned to invest in roads, rail tracks and digital infrastructure, as well as reducing Germany’s debt burden to 60% of gross domestic product, from 64% last year.