BERLIN, May 31 (Reuters) - Europe's biggest economy Germany is set to grow 3.6 percent this year, supported by rising domestic demand, the German IWH economic research institute said on Tuesday, revising its previous forecast of 3 percent growth.
The figure is higher than the German economy ministry's forecast of 2.6 percent growth and tops the 2.9 percent growth forecast by economists in a Reuters poll last month.
The Halle-based IWH is one of six leading German institutes that advise Chancellor Angela Merkel's government on economics.
'Momentum this year will come above all from private investment and private consumption,' the institute said in a report, noting however that quarterly growth should slow from the 1.5 percent pace seen in the first quarter.
Official data on Tuesday showed retail sales grew less than expected in April but unemployment fell in May to 7 percent, its lowest level since reunification two decades ago.
Germany's economy has staged a strong recovery from its deepest postwar recession, and data shows growth continues to broaden with the manufacturing sector buoyant and domestic demand rising as unemployment declines.
Investment, construction and consumption were the main drivers of the economy in the first three months of the year, the statistics office has said, while trade flows continue to boost growth albeit at a more moderate rate.
(Reporting by Christina Amann; Editing by Susan Fenton) Keywords: GERMANY ECONOMY/GROWTH (brian.rohan@reuters.com ; +49 30 2888 5223; Reuters Messaging: brian.rohan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The figure is higher than the German economy ministry's forecast of 2.6 percent growth and tops the 2.9 percent growth forecast by economists in a Reuters poll last month.
The Halle-based IWH is one of six leading German institutes that advise Chancellor Angela Merkel's government on economics.
'Momentum this year will come above all from private investment and private consumption,' the institute said in a report, noting however that quarterly growth should slow from the 1.5 percent pace seen in the first quarter.
Official data on Tuesday showed retail sales grew less than expected in April but unemployment fell in May to 7 percent, its lowest level since reunification two decades ago.
Germany's economy has staged a strong recovery from its deepest postwar recession, and data shows growth continues to broaden with the manufacturing sector buoyant and domestic demand rising as unemployment declines.
Investment, construction and consumption were the main drivers of the economy in the first three months of the year, the statistics office has said, while trade flows continue to boost growth albeit at a more moderate rate.
(Reporting by Christina Amann; Editing by Susan Fenton) Keywords: GERMANY ECONOMY/GROWTH (brian.rohan@reuters.com ; +49 30 2888 5223; Reuters Messaging: brian.rohan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.