BERLIN, Dec 29: The DIW economic research institute expects German economic growth to slow only slightly in 2008 and forecast it will expand by more than two per cent, the head of economic research was quoted as saying on Saturday.

In an advance of a text to appear in the Tagesspiegel am Sonntag newspaper on Sunday, Berlin-based DIW’s Christian Dreger said that gross domestic product (GDP) in Europe’s largest economy would show growth “slightly above two per cent” next year.

“We’re expecting a continuation of the upturn at a relatively high level,” he said, adding more people would feel the upturn next year than in 2007.

Several other economic institutes have recently cut their 2008 growth forecasts to under 2pc.

Dreger also said he expects the unemployment level to fall below three million at least for part of next year. He also expects the inflation rate in 2008 to fall under 2 per cent after averaging 2.2 per cent in 2007.Earlier in the week, Economy Minister Michael Glos said the government will again lower its 2008 growth forecast after already cutting the target in October.

“We’ll have to slightly reduce our growth forecast for 2008,” Glos told Die Zeit newspaper.

The government lowered its official forecast for 2008 in October to 2.0 per cent from 2.4 per cent previously.

Glos did not specify a new forecast for 2008.

Earlier in December, two leading German economic think tanks cut their forecasts for Europe’s largest economy next year, saying weaker investment and a US slowdown would crimp growth.

The Ifo research institute forecast growth of 1.8 per cent next year, trimming predictions it made jointly with other think tanks in October for growth of 2.2 per cent in 2008.—Reuters