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BERLIN, Sept 28: Germany’s finance ministry has cut its forecast for economic growth next year to 1.5 per cent ahead of government coalition budget negotiations due to start on Monday, a government source said on Saturday.
“The ministry only expects growth of 1.5 per cent,” the source said, confirming media reports.
A draft 2003 budget drawn up in July assumed growth next year of 2.5 per cent, as did a promise Berlin gave its European Union partners to bring its total public sector deficit “close to balance” by 2004.
German media reported on Saturday that Finance Minister Hans Eichel would paint a bleak picture of the budgetary outlook at Monday’s meeting.
The source said Eichel had made clear in private conversations that he was serious about sticking to a goal to balance the federal budget by 2006 and may threaten to quit if he does not receive full backing.
JOBLESS: The number of Germans out of work will bounce back well above the four-million mark this winter after a seasonal upturn in the euro-zone’s largest economy that lowered unemployment this month, according to analyst reports published in Germany’s Berliner Zeitung newspaper on Saturday.
Investment bank experts told the daily the numbers of German unemployed could reach up to 4.7 million, a jump from September estimates published on Friday by the paper Die Welt showing a jobless population below the politically sensitive level of four million, at 3.97 million.
Unless the economy picks up this winter, said Commerzbank economist Ulrich Ramm, “we will have 4.5m unemployed by the beginning of the year” 2003.
Dirk Schumacher, an economist at the US investment bank Goldman Sachs, said the numbers could reach 4.7 million. “No boost to the economy is in sight,” he added.
Deutsche Bank economist Norbert Walter predicted jobless numbers closer to 4.4 million, whereas Martin Huefner of HypoVereinsbank said Germany would see “well over four million” workers claiming unemployment benefits.
Huefner added that weather factors would play an important role in determining the state of the economy this winter.—Reuters/AFP
