Powerhouse Germany to raise growth forecasts: reports

16th January 2011, Comments 0 comments

Germany, Europe's top economy, is poised to grow at a faster rate than previously forecast this year and next, according to provisional government estimates leaked to the media over the weekend.

News weeklies Spiegel and Focus reported that Berlin's forecasts, due to be officially published on Wednesday, will estimate output growth this year at between 2.1 and 2.4 percent.

For 2012, Germany is forecast to grow at between 1.6 percent and 1.9 percent, the two magazines said.

If confirmed, this would represent a sharp upwards revision from previous estimates. Berlin currently sees growth of 1.8 percent for this year. The government has not yet published a 2012 forecast.

After its worst recession in more than 60 years in 2009, Germany has embarked on what one analyst has termed a "mind-boggling" recovery.

Driven by its traditional export motor, but also increasingly by domestic demand, German growth boomed in 2010 at 3.6 percent, more than twice what France is expecting for last year.

The result was also better than that anticipated for the United States, at 2.7 percent, and Japan at 3.5 percent, but remained well below the level forecast for China of more than 10 percent.

UniCredit economist Andreas Rees has called it "one of the most mind-boggling turnarounds in German economic history" as the nation leapt "from annus horribilis to annus mirabilis."

Economy Minister Rainer Bruederle, who will present the official figures on Wednesday, already hinted at a hike in the forecasts, telling reporters on Thursday: "There is a good chance for a two before the decimal point."

© 2011 AFP

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