The German economy continues its steady rise, supported by a flexible internal demand which reinforce the labor market and incomes of the population, according to the Bundesbank.

Gross domestic product will grow by 1.8 percent this year, which is slightly faster than the expansion of 1.7 percent projected in June, the bank said in its semi-annual economic outlook.

Growth will continue at 1.8 percent next year, which was stronger than +1.4 percent expected in June. The Bank maintained a forecast for 2018 at 1.6 percent and predicted a 1.5 percent expansion in 2019.

The inflation forecast for 2018 was maintained at 1.7 per cent, while a higher figure of 1.9 percent was forecast for 2019. Inflation is expected to accelerate since labor costs are projected to increase strongly, the bank said. The bank added that consumer prices may rise further than expected, in particular in 2017.