BEIJING, Dec. 31 -- Dagong, China's domestic rating agency, said Tuesday in a statement that it had kept the local and foreign currency sovereign credit ratings of Germany as AA+, and each with a stable outlook.

Strong economic competitiveness and significantly improved fiscal status will provide strong support for the German government's local and foreign currency solvency, Dagong said.

However, restricted by rapidly rising labor cost and large investment gaps, the average rate of long-term economic growth for Germany is expected to be 1.4 percent, it said.

Thanks to fiscal consolidation, the general government achieved a fiscal surplus in 2012 and the government plans to increase spending on education, research and infrastructure.

Dagong estimated the general government deficit will remain at low levels of 0.5 percent and 0.4 percent of GDP respectively in 2013 and 2014.

Over the same period, the general government debt ratio of Germany will drop to 80.6 percent and 78.2 percent, and the fiscal target of reducing government debt ratio to 70 percent by 2017 is likely to be achieved, Dagong said.