27 April 2004, 11:16  Six institutes see German 2004 GDP +1.5%

Germany's six leading economic research institutes have cut their 2004 growth forecast for Europe's largest economy to 1.5 percent from 1.7 percent, a newspaper reported on Tuesday. Citing a copy of the institutes' report as its source, business daily Handelsblatt said the six also saw the German economy growing 1.5 percent in 2005 and that unemployment would average 4.33 million this year and 4.28 million next year. Economy Minister Wolfgang Clement has said the total number of German jobless would drop below four million in the autumn. The report will also say Germany's budget deficit will total 3.7 percent in 2004 and 3.5 percent in 2005. Private consumption, which has declined for two years, will expand by 0.4 percent this year and by 1.2 percent next year. Exports are seen surging by 6.6 percent in 2004, slowing to five percent in 2005. Domestic demand will grow by one percent in 2004 and 1.3 percent next year. Consumer prices are forecast to rise by 1.3 percent in 2004, and by 1.2 percent in 2005.
The institutes are due to release their semi-annual forecast on Tuesday at 0900 GMT. German media had widely reported at the weekend the prediction would be cut back to around 1.5 percent, a view shared by many economists. Germany's economy shrank slightly in 2003, its first full year of contraction since 1993. This year has seen a raft of disappointing economic data, with investor confidence in a recovery weaker than expected and seasonally adjusted unemployment still well over 10 percent. The institutes will also predict growth in the expanded European Union in 2004 will be two percent, rising to 2.3 percent in 2005, Handelsblatt reported. Ten mostly eastern European nations are set to join the EU on May 1.///

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