Germany sticks to cautious growth outlook despite brighter prospects

BERLIN, June 16 (Reuters) - The German government is sticking to its growth outlook for Europe's biggest economy despite solid economic data and upbeat sentiment indicators, Economy Minister Brigitte Zypries said in a Reuters interview on Friday.

Germany's central bank and leading economic institutes have raised their estimates for German gross domestic product (GDP)growth for this year and next, pointing to a broad-based and self-reinforcing upswing propelled by vibrant domestic demand.

The Bundesbank last week raised its growth forecasts for the German economy to a workday-adjusted 1.9 percent in 2017 and 1.7 percent in 2018. Both estimates were 0.1 percentage points higher compared with the previous forecasts.

"I think we should stay realistic. And that's why I think our spring forecast for growth is still good and correct," Zypries told Reuters in an interview on Friday.

The government said in April it expected GDP growth of 1.5 percent in 2017 and 1.6 percent in 2018 on a non-adjusted basis.

"We'll stick to this because we should not underestimate the difficulties that the global economy is currently facing," Zypries said, referring to the threat of rising protectionism and U.S. President Donald Trump's "America First" agenda.

"The reality is that trade relations with the United States are not that easy at the moment," the minister said.

Zypries, a senior member of the centre-left Social Democrats, said that the dispute with the U.S. about trade and climate policies was complicating efforts by the German G20 presidency to reach a joint statement for the G20 summit in Hamburg next month.

"The chancellor and the government as a whole are working very hard to establish unity for this summit," Zypries said. "I hope that we'll succeed. But nobody can tell at the moment because all sides are still working on the different chapters."

"It is therefore our wish to get a unified G20 declaration, a unanimous declaration on trade as well as on other issues. We are working on that. And I hope that we are successful."