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Report: German minister says government will reduce 2008 growth outlook

Report: German minister says government will reduce 2008 growth outlook

Germany's economy minister said the government would have to lower its 2008 growth forecast for the country's economy, Europe's biggest, according to an interview released Wednesday.
The government's current forecast, which dates back to October, is for gross domestic product to expand by 2 percent in 2008, following growth of 2.4 percent this year.
"We will have to go back somewhat on our growth estimate for 2008," Economy Minister Michael Glos was quoted as saying by the weekly Die Zeit. He did not give a potential new figure.
However, he said other factors "will have a positive effect on employees' purses," citing a cut in a payroll levy for unemployment insurance that would take effect Jan. 1 and the likelihood of relatively high settlements in pay negotiations next year.
A cut in the government's growth outlook would put it in line with recent moves by some German economic think tanks to cut their 2008 forecasts to less than 2 percent.
Earlier this month, Glos' ministry said that growth in Germany likely has slowed in the current quarter, weighed down by high oil prices, a strong euro and weaker global growth.
The economy grew by 0.7 percent in the third quarter compared with the previous three months.
Still, the unprecedented strength of the euro _ which has hit all-time highs of nearly US$1.50 _ has raised concerns over the competitiveness of German exports, which have been a key element of the economy's recent strength.
At the same time, the U.S. subprime lending crisis and ensuing market volatility have fueled worries over the health of the American economy, and the possible global impact.


Updated : 2021-06-14 11:53 GMT+08:00