German Economy Set for Modest Growth

The German economy is set to grow only modestly this year, Germany's central bank, the Bundesbank, predicted on Tuesday. New confidence data showed that investors are mutedly optimistic with regard to the outlook for the euro zone's biggest economy in face of a strong euro and high oil prices. Bundesbank President Axel Weber told a news conference in Frankfurt that he expected 2005 to be "another year of modest growth for Germany." There were "reasons not to be too pessimistic in our economic expectations for the current year, which started successfully," the Bundesbank chief said. However, the wide range of different growth forecasts by economic research institutes -- which ranged from 0.6 to 1.8 percent -- showed just how uncertain the outlook for Germany was in the face of runaway oil prices and the weak dollar, Weber said. After calendar-adjusted growth of 1.1 percent last year, gross domestic product (GDP) was expected to expand by around one percent this year, the Bundesbank chief predicted. "2005 will not be anything special. But one can say that Germany has at least overcome its three-year stagnation," Weber said.