BERLIN (Reuters) - Germany's Ifo institute has revised up its expectations for growth in Europe's largest economy this year due to strong private consumption supported by record-low unemployment.
The Munich-based institute said on Wednesday it expected the German economy to expand by 1.9 percent this year from a previous forecast of 1.5 percent in December.
For 2016, Ifo is forecasting growth of 1.8 percent.
"The German economy is experiencing a strong upswing at present," said Ifo economist Timo Wollmershaeuser in a statement.
"Private consumption remains the pillar of the upswing, since private households' income expectations are good due to the improved situation on the labour market."
Ifo's growth forecast is slightly more optimistic than the German government which expects domestic demand to drive a 1.8 percent expansion this year. The central bank predicts 1.7 percent growth in 2015.
In the first quarter German gross domestic product grew 0.3 percent which was a marked slowdown from 0.7 percent growth in late 2014, with foreign trade largely to blame.
Ifo predicts that the number of people in work will continue to rise this year and next and also expects businesses to expand their investment due to cheap financing costs.