German economy powering ahead: institutes
Germany will steam ahead in 2011, leaving most of its rivals trailing in its wake, the country's leading economic institutes predicted Thursday, publishing bullish forecasts for Europe's top economy.
Output is expected to grow by 2.8 percent this year, with the pace dropping slightly next year to 2.0 percent according to the five top institutes in their twice-yearly report.
This was a sharp upwards revision to their previous forecasts in October, when the institutes predicted output growth of 2.0 percent for this year.
"In the spring of 2011, the world economy is enjoying an upswing, mainly due to positive results from emerging economies. Germany too is experiencing a strong upturn," the five organisations said in their report.
"The recovery is being driven both by external demand and by domestic consumption ... much indicates that the expansion will remain strong in the coming months," the economists added.
Unemployment in Germany is already at its lowest level since the country reunified in 1990 but the buoyant economy is poised to drive down jobless lines further, with the rate seen at 6.9 this year and 6.5 percent in 2012.
The strong economy will also bring down Germany's public deficit at a time when its European rivals are battling to meet EU deficit rules.
Germany's deficit should be 1.7 percent this year and shrink further to 0.9 percent in 2012.
Nevertheless, the institutes warned of clouds on the generally sunny horizon coming from the Middle East and Japan, although the economic impact of the nuclear disaster in Fukushima should be "short-lived."
The European Commission has forecast growth of 1.7 percent in 2011 for France and 2.0 percent for Britain. Brussels expects the 17-nation eurozone as a whole to grow by 1.6 percent.
© 2011 AFP