BERLIN, April 14 (Reuters) - Germany’s leading economic institutes urged the government on Thursday to use its budget surplus to support economic growth, adding its voice to criticism of Berlin’s tight fiscal policy from some of its European Union partners.

The federal government has run a balanced budget since 2014 and the state, including social funds, is heading for an overall surplus of 11 billion euros ($12.4 billion) this year and 10 billion euros next, according to the institutes’ estimates.

The institutes, whose analysis feeds into government policy and its economic forecasts, said Berlin should spend the excess on cutting income taxes and boosting investments in infrastructure and education.

“A continuation of the barely growth-oriented economic policy of recent years would not be sustainable,” they said in their spring report.

Boosting investments in education “is also important to facilitate the integration of migrants into the labour market.”

Citing waning demand from abroad for German goods and services, the institutes lowered their 2016 economic growth forecast for Europe’s largest economy to 1.6 percent from 1.8 percent.

As the global economy has slowed, Germany’s traditional role as an export powerhouse has declined, with domestic demand gradually taking over as the main growth driver.

The institutes forecast this trend would continue, predicting a further growth slowdown to 1.5 percent in 2017.

The German economy grew by 1.7 percent in 2015, the strongest rate in four years.

It was helped by robust private consumption and higher state spending on refugees and infrastructure, while a low unemployment rate boosted tax receipts and ultra-loose monetary conditions sent the state’s borrowing costs to all-time lows.

The government is expected to update its economic forecasts for this year on April 20.