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2015 German growth may be better than expects next year

2015 German growth may be better than expects next year

BERLIN: Europe’s biggest economy, Growth in Germany could be better than expected next year and the situation in Europe is not as bad as many people think, the president of Germany’s Bundesbank said.

Jens Weidmann member of the European Central Bank’s Governing Council also reiterated his opposition to ECB plans to buy sovereign bonds.

Weidmann said as things are at the moment and if oil prices remain this low, inflation will be lower than expected, but growth will be better.

The ECB is watching carefully how a recent drop in oil prices will affect euro zone inflation, far below its target of just below 2 percent, and standing ready to do more to keep the region from slipping into deflation.

The Bundesbank this month halved its growth forecast for Germany to 1.0 percent for next year. It also cut its prediction for 2014 growth to 1.4 percent from 1.9 percent in June.

Having largely exhausted its policy toolkit with the key interest rate at record lows of 0.05 percent, broad based purchases of sovereign bonds also known as quantitative easing (QE) are seen as the ECB’s last resort to revive the economy.