Sees German Growth Rebounding to 2.2% in 2002
FRANKFURT (MktNews) - Economic growth has slowed, but there is no sign of recessionary developments in either the United States or Europe, a prominent German economist said in an interview published Wednesday.
"I foresee slower growth but no threat of recession," Horst Siebert, a member of the German government's council of independent economic advisors (the so-called Five Wise Men), told news weekly Die Zeit. The full interview is to be published in Thursday's edition.
According to Siebert, German economic growth should rebound to 2.2% next year, Die Zeit reported. This is roughly in line with forecasts of Germany's leading economic institutes.
"That's not brilliant, but it's not a recession either," he said, rejecting calls for the government to bring forward planned tax cuts in order to spur growth.
"I'm against short-term activism," he said. "We should concentrate on the things that have to be done in the long term."
The Kiel research institute, which Siebert heads, expects German GDP growth of 1.3% this year. Forecasts of other leading institutes range from +1.0% to +1.7%. The government continues to hope for around 2% growth.
As to the U.S., Siebert noted that the economy continued to grow in the first quarter of this year.
"If there is going to be a recession, then we would have to see a huge collapse in the next two quarters," he said, implying he did not expect this to happen.
In other comments, Siebert suggested that the financial crises in Argentina and Turkey can be contained, given the amount of experience that has been gathered with regard to international crisis management.
Siebert said he did not anticipate any growth initiatives to emerge from the G-8 summit this weekend in Genoa, Italy.
"Active economic policy can't be the issue" for the summit, he said, arguing that stability policies must remain the purview of individual countries and not be an object of international coordination.