BERLIN (MNI) – Germany’s council of independent economic advisers
— the so-called five wise men — expects German GDP growth of 2.2% next
year.
The council sharply raised its forecast for 2010 German GDP growth
to 3.7% from the 1.6% it had projected in November of last year.
The German government last month raised its GDP forecasts for this
year and next to +3.4% and +1.8%, respectively, from the +1.4% and +1.6%
projected in April.
“Current economic indicators signal that the upswing should
continue albeit at somewhat slowing speed,” the council said in its
report. External impulses will be increasingly replaced by domestic
momentum, the wise men predicted.
Still, the economists cautioned that the global economic
environment is uncertain due to the heterogeneous developments around
the world.
Because of the healthy economic recovery, Germany will meet the
deficit limit of 3% of GDP set under the EU Stability and Growth Pact by
next year. The wise men forecast a total public budget deficit of 3.7%
this year and 2.4% next year.
The economists assume that the European Central Bank will leave
interest rates unchanged until the end of 2011.
Eurozone average HICP inflation is projected at 1.6% in 2010 and
1.4% in 2011. The ECB’s price stability goal calls for inflation of
close to but below 2%. German inflation is tabled at 1.1% this year and
1.4% next.
For their latest forecasts, the wise men assume an oil price of
around $86 per barrel until the end of the forecasting period. The
euro-dollar exchange rate is assumed at $1.40 until the end of 2011.
[TOPICS: MT$$$$,M$X$$$,M$G$$$,M$$EC$,M$$CR$,MFGBU$,MFX$$$]
