Economists and Bundesbank reforecast

German economic institutions have reforecast their prognoses for the year 2003. The Institut für Weltwirtschaft (IfW) in Kiel has reduced its growth prognosis from 0.4% to 0%. The IfW says Germany remains in recession and real gross domestic product (GDP) will stagnate. The institute argues that the outlook for a recovery in the second half of 2003 has declined and would not allow a more positive position. With the global economy recovering the German market should benefit from 2004 onwards. The current prognosis for next year by the IfW sees GDP growth of around 1.8%. The Bundesbank has also reduced its GDP growth prognosis drastically, from 0.5% to between 0.2% and 0.1%.

The Insitut für Wirtschaftsforschung (IWH) in Halle has also reduced its expectations regarding the German economy. However, the IWH changed its forecast from 0.8% GDP growth for 2003 to 0.75% and remains more upbeat about the market. The Bundesverband deutscher Banken (BdB) and the Bundesverband der Deutschen Industrie (BDI) reacted in a similar manner, believing that the first signs of stabilisation in the German economy are now evident. Both organisations expect an annual GDP growth rate of 2% for 2004, while the BdB forcast only 0.5% for 2003.

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• DACH