BERLIN, Dec 24: German economic growth is gaining pace and its manufacturing sector is optimistic about 2006, the head of the BDI industry association Ludolf von Wartenberg was quoted saying on Saturday.

In an interview with the Neue Ruhr Zeitung (NRZ), von Wartenberg said he expected growth in the manufacturing sector to reach three per cent in 2006 and far exceed the country’s gross domestic product growth (GDP) rate.

It’s impossible to overlook the fact that the economic growth is getting strong, he said. The order books are well filled.

Private economic institutes are forecasting the German economy to grow by between 1.4 per cent and 1.7 per cent in 2006. The economy grew by 1.6 per cent in 2004 before slowing to an expected 0.8pc in 2005.

A sharp rise in domestic corporate investment and strong demand for Germany’s exports are behind the recent upturn.

Von Wartenberg said he was not expecting 2006 to be a boom year but was confident German industry would expand strongly nevertheless.

Aside from further strong export growth, von Wartenberg said the economy would also be boosted by the 2006 World Cup finals that Germany is hosting in June and July, as well as the new government’s improved tax framework for industry.

But he said the upturn could be cut short in 2007 when higher taxes hit consumers. —Reuters