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Galloping growth to hit 2.8 percent

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Galloping growth to hit 2.8 percent
Photo: DPA
14:19 CEST+02:00
Germany's stellar growth is set to continue at full steam, according to leading forecasters who are predicting Europe's largest economy will grow by 2.8 percent, a media report said Wednesday.

Business daily Handelsblatt reported on its website that the spring forecast by Germany's top economic institutes, to be announced in Berlin on Thursday, show that Japan's earthquake and the flow on nuclear crisis will barely have an effect on Europe's powerhouse.

Handelsblatt reported that the institutes expect Germany's GDP will grow by 2.8 percent in 2011 – a big jump on the previous forecast of about 2 percent. That prediction was made in October.

Newsagencies DPA and DAPD, meanwhile, cited unnamed sources saying Germany's gross domestic product was tipped to grow by “well over 2.5 percent.”

The boom will flow through to the job market, with more than 300,000 jobs set to be created.

The predictions come from the Halle Institute for Economic Research, the RWI Essen, the Kiel Institute for the World Economy and the Ifo Institute in Munich.

The Macroeconomic Policy Institute (IMK) in Düsseldorf will also release its forecast on Thursday.

DekaBank, asset manager for the German Savings Banks Association (DSGV), expects growth to be 2.7 percent in 2011 and 2 percent in 2012.

The federal Finance Ministry currently predicts growth of 2.3 percent this year. But on Tuesday Economy Minister Rainer Brüderle said: “It would not surprise me if it is higher.”

The booming economy will relieve pressure on public coffers, Handelsblatt reported. The government deficit would be slashed from 3.3 percent of GDP in 2010 to just 1.7 percent this year and 0.9 percent in 2012.

The Local/DAPD/DPA

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