Germany to revise up growth forecasts: minister

10th April 2011, Comments 0 comments

Germany's economy will expand faster than expected in 2011, a minister said Sunday, amid reports that the International Monetary Fund and Berlin would revise up forecasts for Europe's top economy.

Spiegel newsweekly said both the German government and the IMF are now banking on growth of 2.5 percent this year. Berlin is hoping for at least 2.0 percent in 2012 as Europe's economic powerhouse motors ahead.

The IMF's previous forecast in November was for 2.2 percent. The official German forecast of 2.3 percent will be updated on Thursday.

"I will take into account the positive developments of recent months. I assume that the forecasts will be better than the current figure of 2.3 percent," Economy Minister Rainer Bruederle told the Bild am Sonntag weekly.

He declined to reveal the exact figure in advance but warned that "a certain amount of caution" was warranted given the "increasing international risks."

After suffering a crippling recession in 2009 as a global downturn hit demand for exports, Germany has staged a remarkable economic turnaround, registering its best growth since 1990 last year.

The country's five leading economic institutes Thursday forecast the economy would grow by 2.8 percent in 2011 and 2.0 percent next year, also revising up their projections.

Bruederle said he thought the European Central Bank's decision to raise interest rates for the first time since July 2008 was "appropriate" although he said he saw no "acute inflationary dangers" in the short-term.

© 2011 AFP

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