Economists: German Economy To Grow 1.3 Percent Next Year

BERLIN (AP) — A panel of economic advisers to the German government forecast Wednesday that the country's economy will grow by 1.9 percent this year, and 1.3 percent in 2017 — a slightly slower rate for next year than previously forecast.

The independent German Council of Economic Experts said the forecast 2017 slowdown is primarily due to calendar effects and that "growth momentum will remain essentially unchanged." However, it is advising Germany and others in the 19-country eurozone to "use the tailwinds of the economic upturn to carry out structural reforms."

Among other things, the panel says the EU should conclude free trade agreements with the U.S. to go alongside its recent one with Canada, and that Germany should conduct tax reforms.

Chancellor Angela Merkel gave a noncommittal response to that call.

"For us, it is always time for reforms — there may be differences over whether they are always the way you see them being," she said as she was presented with the panel's annual report.

The group's growth prediction compares with government projections of 1.8 percent growth in 2016 and 1.4 percent growth next year.

Wednesday's report said it sees only "moderate" short-term economic fallout from Britain's vote in June to leave the European Union. Still, it called for "preventing an exit through constructive negotiations or at least concluding a successor agreement that limits the damage for both sides."

It said that the EU's "four freedoms" must not be restricted — code for not allowing Britain to impose substantial restrictions on immigration from the EU while enjoying many benefits of membership. Merkel wholeheartedly welcomed that stance.

Earlier Wednesday, government figures showed that Germany's unemployment rate declined for the second month in a row in October, in another sign of the economy's underlying strength.

The unemployment rate fell to 5.8 percent in October from September's 5.9 percent, with a total of 2.54 million people out of work.

When adjusted for seasonal factors, the rate fell to 6 percent in October from 6.1 percent the previous month.

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