New York: A US Treasury report Wednesday said Germany needs to tap its surpluses to boost demand and help the eurozone pull back from deflation.
The Treasury`s semi-annual report to Congress on international economic and exchange rate policies singled out Europe`s largest economy for keeping its economic policy too tight.
That was not only bad for the euro area but for the global economy, the report said.
"Germany`s anemic pace of domestic demand growth and dependence on exports have hampered rebalancing at a time when many other euro-area countries have been under severe pressure to curb demand and compress imports," it said.
"The net result has been a deflationary bias for the euro area, as well as for the world economy."
It said Germany`s nominal current account surplus was larger than China`s in 2012.
"Stronger domestic demand growth in surplus European economies, particularly in Germany, would help to facilitate a durable rebalancing of imbalances in the euro area."
First Published: Thursday, October 31, 2013, 11:14