IMF urges Germany to invest in infra projects, help lift EU inflation

The IMF recommendations counters Finance Minister's announcements for higher tax revenues

Germany should use its rising tax revenues to invest in infrastructure projects that will enhance its growth potential, and encourage employers to raise wages to help lift euro zone inflation, the International Monetary Fund said on Monday.

The IMF recommendations run counter to the thinking of Finance Minister Wolfgang Schaeuble, who last Thursday announced higher tax revenue estimates for this year and rejected criticism that Germany was not investing enough.

In a report following its annual so-called Article IV meetings with the German authorities, the IMF said Germany's large and persistent current account surplus reflected high domestic savings and better investment opportunities abroad.

"Germany should embrace a set of coordinated fiscal and structural policies to safeguard its strengths and address remaining challenges, including reducing external imbalances," the IMF added.