German government more optimistic on 2007 GDP growth, unemployment UPDATE |
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Wed, 31 Jan 2007 12:22
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(Recasts; adds details, quotes)BERLIN (AFX) - The German government has raised its growth forecast for the current year and predicted that unemployment would fall sharply as the euro zone's biggest economy shrugs off the anticipated global slowdown and a sharp rise in salestax.In its annual economic report, the government forecast that gross domestic product (GDP) would expand by 1.7 pct in 2007, instead of 1.4 pct as previously anticipated.In 2006, the German economy already notched up growth of 2.5 pct, the fastest rate of growth in six years.And the annual average jobless rate would fall to 9.6 pct this year from 10.8 pct in 2005, the government predicted.'The economic engine is running smoothly,' Economy Minister Michael Glos said.'Particularly pleasing is that, in addition to the impulses coming from foreign trade, the domestic economic is contributing increasingly to growth. The economy is standing on two legs and is more robust to the global economic challenges facing us,' Glos said.The economy minister said that the government's reform policies were enhancing Germany's economic performance.'The deep and far-reaching reforms have given investors and consumers confidence for the future and set free economic forces,' he said.Nevertheless, the government must not rest on its laurels and let the current upturn solve the country's remaining economic problems, Glos said.'Further structural reforms are indispensible,' he concluded.'We'll use the upturn for further reforms.'newsdesk@afxnews.comafp/jfb/lamCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Macroeconomics highlights to 10:10 GMT 