Germany's economic expansion is set to continue, but at a slightly slower pace as the improvement on the domestic front is being offset by the subdued external environment, the Economy Ministry said Monday.
In its monthly report for April, the ministry said the economic growth gained momentum at the start of the year. Though domestic factors supporting the economic expansion have improved, the external environment remains subdued. Export prospects are also likely to remain subdued, the report said.
Employment increased significantly in the services sector, and manufacturing output has grown markedly due to production shifts and the mild winter, the report said. Demand for labor remains high and the influx of refugees are likely to cause only a moderate impact on the labor market, the ministry said.
Robust growth in employment and earnings coupled with stable prices have given a boost to household spending. Further, the continued inflow of refugees is expected to lead to a noticeable increase in public spending and give strong impulse to construction.
Companies are also inclined to invest more in plant and machinery as they are cautiously optimistic regarding the economy, the report added.
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