June 11 (Reuters) – Germany’s economic recovery picked up in the spring after a sluggish winter but joblessness is likely to rise, the Bundesbank said on Friday.
In its bi-annual forecasts, the German central bank said it expected exports and inventory cycles to support economic growth in the euro zone’s biggest economy, which it saw expanding by 1.9 percent in 2010 before slowing to 1.4 percent in 2011.
“Since early spring the world economy has increasingly shown positive momentum,” the Bundesbank said. “Initially the main drivers (for Germany) will be exports and momentum from inventory cycles.”
In a staff projection released on Thursday, the European Central Bank raised its forecasts for economic growth in the euro zone for 2010 but lowered them a little for 2011. [ID:nLDE6591UR]
Further job losses in Germany are likely, as industry continues to reduce staff although the number of people employed in the services sector should increase, the Bundesbank said.
The jobless total should rise from 3.3 million this year to 3.4 million in 2011 — equivalent to an unemployment rate of 8.0 percent, from 7.9 percent this year.
Inflation pressures were seen as “restrained”, with harmonised annual inflation rates of 1.2 percent this year and 1.6 percent in 2011. (Reporting by Brian Rohan)