The Hamburg-based Economic Research Institute (HWWA) revised down its forecast for German GDP growth this year to 2.3%, from its previous 2.7% projection, Thomas Straubhaar, HWWA's president, said in an interview with German business magazine Focus-Money.
HWWA is the latest of Germany's six major economic research institutes to revise down its growth forecast for this year. The week the Kiel Institute cut its forecast to 2.1% from 2.4%, while Ifo cut its projection modestly to 2.4% from 2.5%. The DIW institute cut its forecast to 2.1% from 2.5%.
German Chancellor Gerhard Schroeder said Tuesday he saw no reason for the federal government to lower its growth forecast of 2.75%, arguing that German growth this year would remain "robust."
HWWA's Straubhaar said he did not expect that a further downward revision in the institute's growth forecast would be necessary, the magazine reported. "The slowdown of the U.S. economy will curb (German) growth by one percentage point, but the (German) tax reform will largely offset this effect," Straubhaar was quoted by the paper as saying.
In addition, Straubhaar expressed confidence that the federal government would meet its goal to reduce unemployment to 3.5 million by 2002. The reduction in unemployment would result from continued economic growth and favourable demographic factors, Straubhaar said.
"Therefore, the goal of the Chancellor (Gerhard Schroeder) is realistic and not too ambitious," Straubhaar added.