Germany’s Bundesbank has raised its forecast for growth of the euro zone’s largest economy this year and next, highlighting the increasing divergence between the currency block’s member countries.
The bank said it expects Germany to grow 0.5% this year and 1.7% next year compared with June-forecasts of 0.3% and 1.5% respectively.
The bi-annual projections also forecast growth of 2% in 2015.
Germany has been a major driver of the euro zone recovery, which has lost some of its momentum recently with major economies like France and Italy loosing steam.
The Bundesbank said the improvement was driven mainly by demand at home rather then from abroad, benefiting from low-interest rates and growing incomes.
“The German economy is in good shape: the unemployment rate is low, employment is rising, and wage growth is returning to normal,” Bundesbank President Jens Weidmann said.