Oil price prompts cut in German growth forecast

7th September 2005, Comments 0 comments

7 September 2005, KIEL, GERMANY - The rising price of oil prompted one of Germany's leading economic think-tanks, the IfW in Kiel, to reduce Wednesday its growth forecast for the German economy next year to 1.1 per cent from an initial 1.3 per cent.

7 September 2005

KIEL, GERMANY - The rising price of oil prompted one of Germany's leading economic think-tanks, the IfW in Kiel, to reduce Wednesday its growth forecast for the German economy next year to 1.1 per cent from an initial 1.3 per cent.

The World Economy Institute said, "The latest jump in the price of crude oil has worsened the outlook for Germany." The institute's growth forecast for the current year remains at 0.7 per cent.

Its economists said the overall trend was towards recovery, but they discounted the outcome of the September 18 general election, which centre-right parties are expected to win, as having much impact on the economy, at least this year.

They said growth in other European Union nations was boosting German exports, but domestic demand was being restrained by the rise in energy costs. They calculated there would be a slight stimulus to growth if the centre-right cut payroll levies while raising sales tax.

DPA

 

Subject: German news

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