Higher German Growth Forecast

The German Institute for Economic Research (DIW), one of Germany’s leading economic think tanks, announced on Thursday that it had upgraded its forecasts for German growth for this and next year as the surging global economy fuels the country’s exports. In the institute’s latest report, it pencilled in economic growth of 1.8 percent for Germany in 2004 and 2.1 percent in 2005. The research institute had previously predicted growth of 1.4 percent for both years. “Germany is standing at the beginning of a cyclical upturn,” DIW said. The economic momentum is expected to peak at the beginning of 2005, boosting private consumption and creating employment. DIW predicted the annual average unemployment total in Germany to reach 4.35 million in 2004, 30,000 less than in 2003. The total number of people claiming unemployment benefits would drop by a further 75,000.