BERLIN (MktNews) - Germany's economic upswing will continue in 2001 and gain pace during the course of the year, the German Finance Ministry said on Thursday after the German Federal Statistics Office reported a slowing of GDP growth in the fourth quarter of 2000.
"The economic upswing should continue in 2001 and gain pace in the course of the year. This assessment is supported by the favourable general economic conditions," the Finance Ministry said right after the publication of the German 4Q GDP numbers.
Fourth quarter real GDP rose 0.2% quarter-over-quarter, at the low end of forecats, and was up an unadjusted 1.9% year-over-year. Moreover, third quarter GDP was revised down to +0.3% q/q from the +0.6% gain originally reported, showing a clear slowdown in German growth in the second half last year.
The Ministry cited the landmark German tax reform as one of the main reasons for the favourable economic climate.
The reform -- which came into effect at the start of this year -- will ease the overall tax burden by some DM45 billion per year or an average of 1% of disposable income for private households, according to the Finance Ministry.
"First of all, this will favor private consumption and in turn brighter (retail) sales prospects will stimulate corporate capital spending," the Ministry forecast.
The Ministry blamed higher energy costs last year as the main reason for slowing GDP-growth in 4Q 2000.