(MENAFN- AFP) Germany's leading economic think tanks raised their growth forecast for 2016 on Thursday, with big-spending consumers and government expenditure on migrants giving a boost to Europe's largest economy.
The five institutes -- the DIW in Berlin, IWH in Halle, Ifo in Munich, IfW in Kiel and RWI in Essen -- predicted that the economy would grow by 1.9 percent this year, up from their April estimate of 1.6 percent.
"The German economy is experiencing a moderate upswing," they wrote in their autumn report, adding that domestic demand remains the key driver of the country's growth.
"The job market is still in good shape and continues to support private spending, while public spending has been boosted by refugee-related expenditure," said Ferdinand Fichtner of the DIW.
German businesses on the other hand were making a "below-average contribution" to the recovery, the experts wrote.
The economists also warned of clouds on the horizon, as sluggish global demand weighs on exports -- historically a major contributor to German prosperity -- while the Brexit fallout could yet make itself felt.
Although data so far suggests German business decisions have not been substantially affected by Britain's June vote to leave the European Union, this could change if the Brexit negotiations become acrimonious, the authors said.
A worsening of trade ties between the EU and Britain could weaken British demand for imports, they cautioned, which in turn could hurt German exports and investment.
Looking ahead to 2017, the think tanks expect growth to slow to 1.4 percent, down from an earlier estimate of 1.5 percent.
For 2018, they forecast that gross domestic product would expand by 1.6 percent.
The government expects GDP to expand by 1.7 percent this year.
The Federal Labour Office on Thursday said unemployment was unchanged in September at 6.1 percent, holding at its lowest level since re-unification.
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