German growth will remain solid in the second quarter but likely to lose some of its momentum, German Central Bank (Bundesbank) said in a monthly report on Tuesday, echoing private forecasts which have also pointed to more muted growth.
The euro zone's largest economy grew by 0.7 per cent in the first quarter, its strongest quarterly rate since the first quarter of 2014, pulling along a euro zone that is still saddled with high debt and high unemployment . "Good conditions in the labour market , rising income expectations and stable prices are expected to keep consumer spending up," Germany's central bank said.
"However, oil prices are not expected to fall further and the strong rise in consumer purchasing power over the last two quarters is expected to recede," the bank said.
It added that it was uncertain if the strong levels of exports seen in the first quarter could be maintained.