BERLIN (MktNews) - Germany's Economics Minister Werner Mueller Wednesday offered an upbeat assessment of the economic performance of the eurozone's largest economy, which he saw supported by the euro current trend change.
"We are experiencing a trend reversal in the DAX (Germany's stock market index) as well as in the euro. Furthermore, there are positive effects, largely due to declining inflation rates which will fall again to below 2.0% by end of the year," Mueller told Germany's business daily Handelsblatt in an interview due for publication on Thursday.
Together these effects will push up real incomes and allow the government's income tax cuts to translate into stronger consumer spending, Mueller added.
Mueller criticized that the positive signs of the recovery had not been noticed yet, pointing to the brighter outlook in the German construction industry and the favorable situation of the German automobile industry.
In the light of these developments, Mueller told Handelsblatt "German GDP growth of up to 3.0% in the first half of 2002" is possible. For this year, Mueller forecast economic growth of around 1.5%.
Earlier this week, Mueller told the Westdeutsche Allgemeine Zeitung that growth of +3.5% was possible in the first half of 2002.
Mueller's assessment is less rosy than the government's official 2001 growth target of "around 2.0%." However, the government is widely expected to cut its GDP forecast later in the year.
German Chancellor Gerhard Schroeder recently conceded growth would be lower than the official forecast, but still estimated it would rise between 1.5% and 2.0%.
Germany's leading economic think tanks have predicted growth of between 1.0% and 1.5% in the eurozone's largest economy this year.