German think tanks revise down growth forecast | Business| Economy and finance news from a German perspective | DW | 18.04.2013
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German think tanks revise down growth forecast

Germany's four leading economic research institutes have pared back their growth forecast for Europe's largest economy. They said growth would stay below the previously expected rate, but were more positive about 2014.

Germany's leading economic think tanks said the domestic economy would not expand by more than 0.8 percent throughout this year.

The four think tanks presenting their spring report in Berlin on Thursday said they had to revise their prediction of 1 percent growth from last fall because of a continuously difficult global economic environment.

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German business confidence grows

They added, however, that there would be a greater pick-up next year, with the economy to expand by 1.9 percent. "The situation in the financial markets has eased somewhat thanks to subsiding uncertainty regarding the future of the European monetary union," the report said.

Robust labor market

The experts specifically mentioned the role of the European Central Bank (ECB), which in their view had helped to dispel fears of an end to the eurozone by providing lenders with large amounts of ultra-cheap money.

"The headwind in the world economy has also tailed off a bit," the think tanks commented in their spring forecast.

They expected the number of unemployed people in Germany to decrease further to an average of 2.7 million people in 2014, down from an estimated 2.9 million this year. The researchers added consumer prices would most likely increase by only 1.7 percent on average. In 2014, though, inflation was set to rise to 2 percent, the report claimed.

hg/kms (dpa, AFP)

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