By Gernot Heller
BERLIN (Reuters) - The German government will raise its 2017 growth forecast for Europe's biggest economy to 2.0 percent, a sharp increase from its earlier estimate of 1.5 percent and the strongest rate since 2011, a source told Reuters on Tuesday.
Berlin also plans to lift its 2018 forecast for gross domestic product (GDP) to expand 1.9 percent, up from its earlier forecast of 1.6 percent, the person familiar with the projections said.
Economy Minister Brigitte Zypries will present the government's updated forecasts on Wednesday.
The German economy grew by 1.9 percent in 2016, the strongest rate in five years, propelled by private consumption and state spending as households and authorities are benefiting from record-high employment and ultra-low borrowing costs.
The International Monetary Fund on Tuesday raised its growth forecast for the German economy to a calendar-adjusted 2.0 percent in 2017 and 1.8 percent in 2018.
The government's growth forecast figures are not adjusted for workdays. Due to the unusually strong calendar effect in 2017, the forecast would translate into an adjusted growth rate of 2.3 percent this year.
(Reporting by Gernot Heller; Writing by Michael Nienaber; Editing by Michelle Martin and Matthew Mpoke Bigg)
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