BERLIN (MktNews) - The chief economists of the ten leading German private banks forecast economic growth in the eurozone and in Germany to slow this year while they expect U.S. growth to pick up in the second half of the year, according to a survey by the German Banking Association (BDB) published Monday.
The ten chief economists forecast that eurozone growth would slow to 2.6% this year from 3.4% last year.
German economic growth is estimated to slow to 2.2% in 2001 from 3% last year. The German government's official forecast is for growth rate of 2.75% this year.
The chief economists cited the sharp economic slowdown in the U.S. and a weaker global economy as the main reasons for slower eurozone and German growth this year. And the continued weakness of the German construction sector is the main reason why German economic growth will continue to lag behind the eurozone average this year.
The chief economists forecast that German construction investment will decrease by 1% in 2001 after a drop of 2.5% last year.
"The biggest risk (for the eurozone economy) is the threat of prolonged economic weakness in the U.S., which cannot be excluded at the moment," the chief economists warned. However, they are still "quite confident, that the U.S. economy will gain in pace in the second half of the year," according to the survey.
"Still, in our opinion the U.S. economy will not attain the extraordinary high growth rates seen in the last two years," the chief economists caution.
In the eurozone, growth momentum will come largely from stronger private demand, spurred by tax cuts in Germany, France and Italy. But eurozone import growth (+8.0%) will be virtually the same as export growth (+7.9%) in the eurozone this year, reducing the contribution of net exports to GDP, according to the survey.
Turning to the job market, the chief economist forecast unemployment in the eurozone will sink by 0.6 per centage point to an average unemployment rate of 8.5% in 2001.
German unemployment is seen decreasing by some 250,000 to a yearly average of 3.6 million this year, according to the survey.