May 15, 2013 / 11:16 AM / in 5 years

UPDATE 1-German minister sees investment boost coming very soon

* Roesler tells Reuters worst behind German economy

* FDP chief expects investment to provide momentum

* Sees need for monetary policy to return to normal

BERLIN, May 15 (Reuters) - Investment will return soon to breathe new life into Germany’s economy, a top cabinet minister and ally of Chancellor Angela Merkel told Reuters on Wednesday after data showed Europe’s largest economy crept back into meager first-quarter growth.

“The positive development of the economy will continue further. This is true for the current year, but especially for 2014,” Economy Minister Philipp Roesler said in an email response to questions from Reuters.

The economy crept back into weaker-than-expected growth of 0.1 percent in the first quarter, helped by a rise in private consumption. That led some economists to cut full-year forecasts and underscored that Europe’s powerhouse cannot be relied on to drive a regional recovery.

But Roesler, whose Free Democrats want to renew their coalition with Merkel’s conservatives if she wins a third term in September’s election, said there was “every reason to be confident” in the German economy.

Recent data has pointed to a timid recovery and Roesler said figures like a rise in industrial orders in March showed the toughest phase had been left behind.

He said that investments, which weakened last year and fell quarter-on-quarter in the first three months of 2013, would strengthen again “very soon” to give the economy fresh momentum.

The minister played down talk of global currencies being in a race to devalue, but said monetary policy should return to normal as quickly as possible.

“We are not witnessing competitive devaluation,” he said. “But it is clear that the markedly expansive monetary policy we are now seeing mainly in Japan and the United States - but also Europe - will not remain without effect on currency markets.”

Policymakers are concerned Japan is engineering an export-led recovery that could hinder other regions’ ability to grow, but having urged Tokyo for years to revive its economy, other world powers’ complaints are now subdued.

Roesler said high liquidity on financial markets raised the “risk of exaggeration” on markets.

“We must act against this risk. That works best if the (European Central Bank) focuses on its classic task of implementing monetary policy geared towards price stability,” he said.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below