Germany says economy to grow by 1.8 pct this yr, 2.0 pct next yr

BERLIN, April 15 Tue Apr 15, 2014 7:08am EDT

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BERLIN, April 15 (Reuters) - Germany, Europe's largest economy, will grow 4-1/2 times as much this year as in 2013 thanks to strong domestic demand and increases in investment, the Economy Ministry said on Tuesday.

It said the economy would expand by 1.8 percent this year and by 2.0 percent next year. That compares with meagre growth of just 0.4 percent in 2013, when exports struggled and some firms held back on investments due to uncertainty.

Domestic demand will climb by 1.9 percent this year before increasing by 2.1 percent next year, the ministry said.

It estimated exports would gain traction this year with 4.1 percent growth and expand by 4.6 percent next year.

Imports, however, are seen increasing by an even stronger 4.7 percent this year and by 5.1 percent in 2015, meaning foreign trade will not contribute to gross domestic product (GDP) growth this year and will add just 0.1 percentage points next year.

Investment in construction and equipment is seen rising this year and next. (Reporting by Michelle Martin)

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