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IfW Press Release March 10, 2006
Kiel Institute: Business Cycle Forecast:
Strong, But Only Short Upswing in Germany
The German economy is in a strong upswing. For the first time in five years domestic demand tightens noticeably. We revise our forecast for GDP growth in 2006 from 1.5 to 2.1 per cent. Next year, however, the expansion will lose momentum, as the rise of the value added tax rate, higher interest rates and the slower expansion of the world economy dampen activity. Real GDP will only increase by 1.2 per cent (before: 1.0 per cent). The situation on the labor market will improve only modestly.
Contact:
Prof. Dr. Joachim Scheide
Phone 00-49 (431) 8814-264