18 June 2001, 16:56  German Banks, Kiel Institute, HWWA Cut 2001 Growth Forecasts

The Association of German Banks (BDB) said it has cut its forecast for German growth in 2001 to around 1.75%, maybe slightly lower, from "around 2.0%", BDB economist Volker Hofmann told MNI. He said the reason was higher inflation, which is dampening consumer spending. The HWWA think-tank cut its forecast to nearer the BDB's level, to 1.7% from a previous prediction of 2.3%. It expects growth to pick up next year to around 2.2%. It also said the ECB should not move too quickly to cut interest rates. Meanwhile, the Kiel economics research institute reduced its forecast to a lower level still. It has cut its forecast three times already, and now predicts growth of 1.3%, down from 2.1% predicted in March.

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