Think-Tanks Cut German Growth Forecasts

Three leading economic research institutes in Germany revised downward Tuesday their forecasts for growth of the euro-zone's biggest economy this year and next year, with one of them, Munich-based Ifo, urging the ECB to intervene to stop the rising euro. Ifo, Germany's leading economic think-tank, cut its forecasts for growth both in 2004 and 2005, estimating that the economy "has been stuck in a fundamental growth crisis for a decade and there is still no end in sight." Ifo said it was penciling in gross domestic product (GDP) growth of 1.7 percent in 2004, which would slow even further to 1.2 percent in 2005. In its last set of forecasts published in October, Ifo and the other five leading economic research institutes, had been forecasting German growth of 1.8 percent this year and 1.5 percent next year. The Hamburg-based HWWA said it was penciling in growth of just 0.9 percent in 2005 after an anticipated 1.7 percent this year. And the Halle-based IWH lowered its prognosis to 1.7 percent in 2004 and to 1.3 percent in 2005.