Growth forecast up to 3 percent with unemployment to shrink

The German government will increase this year's growth forecast to 3 percent, up from the previous 1.4 percent, due a stronger than expected recovery, according to the Neue Osnabrucker Zeitung on Saturday.

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Berlin also expected an improvement in the job market with the number of unemployed dropping below three million, the paper said, quoting figures from Chancellor Angela Merkel's Christian Democratic Union party.

The federal government left its growth forecast unchanged at 1.4 percent in April, but last month the central bank revised its forecast to "around 3 percent," up from 1.9 percent.

In the second quarter, the Eurozone's top economy recorded growth of 2.2 percent, the highest since reunification in 1990.

The number of unemployed stood at 3.19 million, or 7.6 percent, in August.

"In 2011, the government sees clear signs of continuing growth and positive developments in the job market, even if the growth rate is less strong than this year," Georg Schirmbeck, a budget expert for the party, told the newspaper.