Economists boost growth forecasts for Germany

Economists boost growth forecasts for Germany
Photo: DPA
Economists from leading German banks and economic research institutes on Thursday adjusted their 2010 growth forecasts for Europe's largest economy upwards amid improving signs for a healthy recovery after the financial crisis.

Deutsche Bank, Germany’s largest private financial institution, now predicts economic growth of 1.4 percent for 2010, up one percentage point from its previous forecast of just 0.4 percent, daily Frankfurter Rundschau reported.

The bank also reduced its forecast for 2009 to a contraction of 5.2 percent, down from 6.0 percent.

Meanwhile the German Institute for Economic Research (DIW) reduced their projected 2009 economic shrinkage to between 5.0 and 6.0 percent, down from 6.4 percent. The DIW also said their anticipated growth rate of 0.5 percent for next year was too low.

Frankfurt-based Dekabank and investment bank Goldman Sachs also brightened their economic outlooks.

“The horror scenario from last year of five million jobless is off the table,” Dekabank spokesperson Andreas Scheuerle told Frankfurter Rundschau.

Experts are still warning against too much euphoria over the new predictions, though.

“We are seeing a stabilisation phase,” DIW economy expert Christian Dreger told the paper. “But overall Germany will slowly move itself out of the crisis.”

Gustav Horn, head of macroeconomic and market research at the Hans Böckler Foundation (HBSt), said he fears setbacks.

“It’s not yet the recovery,” Horn said. “Now there is no steep climb ahead, but a long valley hike.”

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