Germany To Raise '07 Growth Forecast To At Least 2% - Report

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Sat, Apr 7 2007, 09:29 GMT
http://www.djnewswires.com/eu


BERLIN (AP)--The German government plans to raise its forecast for the country's economic growth this year to at least 2%, the economy minister was quoted as saying Saturday.

The German economy, Europe's biggest, expanded by 2.7% last year - its best performance since 2000 - as stronger spending at home bolstered an export boom.

The government is currently predicting 1.7% growth this year - an estimate that it raised in January from 1.4%. Economy Minister Michael Glos told the Bild am Sonntag newspaper that another increase is on the way.

\"At the end of April, I will correct significantly upward the growth forecast for the current year,\" Glos was quoted as saying in a preview of an interview to be published Sunday. \"There will be a 2 in front of the point.\"

Growth forecasts for this year have been lower than last year's figure because Germany raised its value-added tax to 19% from 16% on Jan. 1 in a move aimed largely at keeping the country's budget deficit in check.

However, the impact of that move appears to be limited, with business and consumer confidence surveys now on the rise.

Germany's economic improvement has helped push down its persistently high unemployment.

In March, the unadjusted jobless rate was 9.8%, with 4.1 million Germans out of work. Unemployment peaked at 12.6% in February 2005, when the number of jobless Germans reached a post-World War II record of 5.216 million.

\"If the good development continues, it could well be that the number of unemployed sinks below 3.5 million in the fall,\" Glos said, according to Bild am Sonntag.

(END) Dow Jones Newswires

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