By Nina Adam

FRANKFURT-?-?Germany's top economic advisers slightly raised their 2017 growth forecast for Europe's largest economy on Monday and rejected international criticism of Germany's large current account surplus.

German gross domestic product is forecast to rise by 1.7% in 2017 and 1.6% in 2018, adjusted for calendar effects, according to the Council of Economic Experts, an independent body that advises the German federal government. In unadjusted terms, growth in 2017 is seen being lower than in adjusted terms, because there are fewer working days than in 2016.

The council previously forecast the Germany economy would grow by 1.6% in 2017. On Monday, it said the German economy was in an upswing, underpinned by an expansionary fiscal stance and ample stimulus by the European Central Bank.

Economic indicators "paint a positive picture" and growth in the first half of 2017 will probably be slightly stronger than previously expected, the council said. A pickup in inflation, however, is likely to weigh on household consumption in 2017 and 2018.

Regarding international criticism of Germany's large current account surplus--an indicator of the country's exporting prowess and of German companies' reluctance to invest at home--the council said, "The German current account surplus is high indeed, but it does not signal a macroeconomic imbalance."

The council said that a big increase in German government expenditure--as advocated by some international economists and politicians--could have a "destabilizing effect" on Germany and the overall eurozone, ?the council said. Instead, itsaid the government should do more to enhance Germany's attractiveness to investors, because stronger investment would help lower the current account surplus.

The council forecast a slight reduction in Germany's current account surplus to 7.1% of GDP in 2018 from 7.5% in 2017 and 8.3% in 2016.

The council's comments follow criticism by U.S. President Donald Trump's administration of Germany's export-led growth. Mr. Trump has accused Germany of flooding the U.S. with cars, while U.S. car makers aren't given enough access to the German market. Peter Navarro, the head of Mr. Trump's National Trade Council, has said German exporters have an unfair advantage because of the euro's weak exchange rate.

-Write to Nina Adam at

(END) Dow Jones Newswires

March 20, 2017 07:25 ET (11:25 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.