Economic Institute Predicts 1.8 Percent Growth Next Year

Germany’s Ifo economic research institute said on Friday it expects the economy to grow by 1.8 percent next year. Hans-Werner Sinn, president of the Munich-based research institute said next year’s tax cuts should account for 0.2 percent of the expected growth, with a further 0.5 percentage points generated by the higher number of working days in 2004 compared with 2003. Sinn told reporters, "in particular, we expect growth impulses through export, because it’s powered by growth of the global economy." He however said that export-related growth still remained an uncertain factor when it came to overall growth expectations, because it’s still unclear how high the euro will rise against the dollar. Sinn also pointed out that a recovery in the German labor market is still not in sight. He said unemployment will ease slightly to an average 4.3 million people in 2004 from 4.38 million in 2003, but only as a result of statistical adjustments.