German government lifts 2017 growth forecasts to 1.5 percent: sources

A general view shows the old city skyline at Unter den Linden street with the construction site of the Berliner Schloss - Humboldtforum in Berlin

BERLIN (Reuters) – The German government has slightly raised its growth forecasts for Europe’s biggest economy for this year and next due to increased optimism about rising global demand, two senior government officials told Reuters on Tuesday.

The government now expects gross domestic product (GDP) to expand by 1.5 percent in 2017 and by 1.7 percent in 2018, both up 0.1 percentage points from the previous forecasts in January, the officials said.

The labor market is expected to add roughly 1 million new jobs this year and next which is likely to support domestic demand and boost tax revenues, they said.

Economy Minister Brigitte Zypries will present the government’s updated forecasts on Wednesday. It will be the basis for the latest tax revenue estimates due in mid-May.

(Reporting by Rene Wagner, Matthias Sobolewski, Michael Nienaber; Editing by Madeline Chambers)