22 October 2004, 14:59  Buba's Stark says oil clouds econ outlook

Oil's rise to over $50 a barrel has clouded the German and global economic outlook in the past "three to four weeks", Bundesbank Vice-President Juergen Stark told in an interview on Friday. Stark said he did not expect the current level of the euro to pose a lasting threat to Germany's economy due to the competitiveness of German firms, but said any slowdown in global growth could hit exports, up to now the economy's main prop. "We can expect growth next year of around 1.5 percent, adjusted for the number of working days," Stark said, but added that depended on "many factors". "If oil prices stay around $50 then one must expect the world economy to slow, although not collapse. One can't rule out this would have an impact on an export-driven economy like Germany's," Stark said. "One can't yet say to what extent exports would be affected. To what extent domestic demand could compensate is also up in the air," he added. "The last three to four weeks have added a small degree of uncertainty as to the economic outlook," he said. But he dismissed suggestions the euro's rise to near eight month highs against the dollar could dent exports. "I expect that the current development will not pose a lasting threat to the German economy given its competitiveness and high level of exports to the European Union," Stark said.///

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