Germany Cuts Economic Growth Forecasts for 2003 and 2004
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Germany Cuts Economic Growth Forecasts for 2003 and 2004
Alemanha vai cortar (outra vez) as previsões de crescimento deste ano e do próximo.. Mais um entrave na capacidade de criar emprego?... mas nos mercados o optimismo continua.
Germany Cuts Economic Growth Forecasts for 2003, 2004 (Update2)
Last Updated: October 15, 2003 07:35 EDT
Oct. 15 (Bloomberg) -- German Chancellor Gerhard Schroeder's government will next week lower its forecasts for growth in 2003 and 2004, an official said, as Europe's largest economy recovers more slowly than expected from its second recession in two years.
The government will say the economy may grow about 0.25 percent this year, after predicting expansion of 0.75 percent in April, said the official, who asked not to be identified. Growth will accelerate to between 1.5 percent and 1.75 percent in 2004, he said, less than the 2 percent forecast six months ago.
``We're expecting a slow acceleration of the recovery in the course of next year,'' said Otmar Lang, an economist at Deutsche Bank AG in Frankfurt, Europe's second-largest bank by assets. ``We're counting on the government's plan to bring forward tax cuts, company investments and rising exports.''
Germany's economy has grown by less than 1 percent for two years, driving unemployment to a 4 1/2-year high earlier this year. Schroeder's government will put plans to bring forward income-tax cuts, aimed at stoking a recovery, to a vote in the lower house of parliament on Friday.
European Central Bank council member Ernst Welteke said yesterday that the German economy grew 0.2 percent in the third quarter. Business confidence rose near a 2 1/2-year high in September, the Ifo institute's survey showed. Exports and factory orders gained the month before.
Bank Earnings
Germany's benchmark DAX stock index has gained 24 percent this year. Morgan Stanley said today that earnings at German banks such as Deutsche Bank may rise as the economy shows signs of recovery, lending to households accelerates and stock and bond mutual funds attract more investors.
SAP AG, the world's largest maker of business-management software, said last week that third-quarter license revenue beat analyst forecasts as it signed more contracts in the U.S.
The recovery is still patchy. Investor confidence slipped in October, ending the longest period of straight gains in a decade, an index measuring growth expectations by the ZEW Center for European Economic Research in Mannheim showed yesterday.
``I am carefully optimistic, though sentiment in most of the economy is better than the situation on the ground,'' said Joerg Fuhrmann, chief financial officer of Salzgitter AG, Germany's second-largest steelmaker, said in an interview. ``Opinion about prospects is split.''
Schroeder is planning to bring forward by one year to 2004 tax cuts worth about 16 billion euros ($18.7 billion). The bill to be presented to the lower house of parliament on Friday reduces the top rate of personal income tax to 42 percent from 48.5 percent on Jan. 1 and lowers the bottom rate to 15 percent from 19.9 percent.
Economy Boost
Germany's DIHK association of industry and commerce has said early tax cuts could add as much as half a percentage point to next year's growth. Executives including Siemens AG Chief Executive Office Heinrich von Pierer back Schroeder's plans.
A German revival may help the $8 trillion economy of the dozen countries sharing the euro to expand after it contracted in the second quarter. The French economy, Europe's third-largest, probably grew 0.3 percent in the third quarter and may expand 0.5 percent this quarter, the Bank of France said yesterday.
The government will publish its economic outlook on Oct. 23, the official said, adding it's unlikely the forecasts will change before then. Next week's reduction of the 2003 growth forecast will be the fourth since Schroeder won reelection a year ago.
Germany Cuts Economic Growth Forecasts for 2003, 2004 (Update2)
Last Updated: October 15, 2003 07:35 EDT
Oct. 15 (Bloomberg) -- German Chancellor Gerhard Schroeder's government will next week lower its forecasts for growth in 2003 and 2004, an official said, as Europe's largest economy recovers more slowly than expected from its second recession in two years.
The government will say the economy may grow about 0.25 percent this year, after predicting expansion of 0.75 percent in April, said the official, who asked not to be identified. Growth will accelerate to between 1.5 percent and 1.75 percent in 2004, he said, less than the 2 percent forecast six months ago.
``We're expecting a slow acceleration of the recovery in the course of next year,'' said Otmar Lang, an economist at Deutsche Bank AG in Frankfurt, Europe's second-largest bank by assets. ``We're counting on the government's plan to bring forward tax cuts, company investments and rising exports.''
Germany's economy has grown by less than 1 percent for two years, driving unemployment to a 4 1/2-year high earlier this year. Schroeder's government will put plans to bring forward income-tax cuts, aimed at stoking a recovery, to a vote in the lower house of parliament on Friday.
European Central Bank council member Ernst Welteke said yesterday that the German economy grew 0.2 percent in the third quarter. Business confidence rose near a 2 1/2-year high in September, the Ifo institute's survey showed. Exports and factory orders gained the month before.
Bank Earnings
Germany's benchmark DAX stock index has gained 24 percent this year. Morgan Stanley said today that earnings at German banks such as Deutsche Bank may rise as the economy shows signs of recovery, lending to households accelerates and stock and bond mutual funds attract more investors.
SAP AG, the world's largest maker of business-management software, said last week that third-quarter license revenue beat analyst forecasts as it signed more contracts in the U.S.
The recovery is still patchy. Investor confidence slipped in October, ending the longest period of straight gains in a decade, an index measuring growth expectations by the ZEW Center for European Economic Research in Mannheim showed yesterday.
``I am carefully optimistic, though sentiment in most of the economy is better than the situation on the ground,'' said Joerg Fuhrmann, chief financial officer of Salzgitter AG, Germany's second-largest steelmaker, said in an interview. ``Opinion about prospects is split.''
Schroeder is planning to bring forward by one year to 2004 tax cuts worth about 16 billion euros ($18.7 billion). The bill to be presented to the lower house of parliament on Friday reduces the top rate of personal income tax to 42 percent from 48.5 percent on Jan. 1 and lowers the bottom rate to 15 percent from 19.9 percent.
Economy Boost
Germany's DIHK association of industry and commerce has said early tax cuts could add as much as half a percentage point to next year's growth. Executives including Siemens AG Chief Executive Office Heinrich von Pierer back Schroeder's plans.
A German revival may help the $8 trillion economy of the dozen countries sharing the euro to expand after it contracted in the second quarter. The French economy, Europe's third-largest, probably grew 0.3 percent in the third quarter and may expand 0.5 percent this quarter, the Bank of France said yesterday.
The government will publish its economic outlook on Oct. 23, the official said, adding it's unlikely the forecasts will change before then. Next week's reduction of the 2003 growth forecast will be the fourth since Schroeder won reelection a year ago.
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