"Disposable incomes grow significantly and the job market remains stable"
- Berlin-based think tank
Consumer prices in Europe's largest economy were confirmed at two year low, according to a final consumer price index released by the Federal Statistical Office.German inflation rose 1.4% since March 2012, unchanged from a previous estimate and down from the 1.5% inflation rate seen in February. On a monthly basis, prices increased by 0.5%. The current inflation rate is below the European Central Bank's medium term inflation maintenance target of 2.0%. At the same time, stable prices and improved condition of the labour market make Germans optimistic about their financial situation. Earlier this month, German Institute for Economic Research predicted that German economy would expand by 0.7% and 1.6% in 2013 and 2014, respectively.
"Disposable incomes grow significantly and the job market remains stable, these strengthen consumer spending which would support growth," said the Berlin-based think tank in a statement on Wednesday.
"The largest upward pressures came mainly from a seasonal surge in manufactured product prices at the end of the winter sales and to some extent from some prices of services associated with the winter holidays," Insee said in a statement.
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