German institutes to raise 2006 GDP growth forecast

The six leading German economic institutes will raise their forecast for the country's 2006 gross domestic profit growth to 2.3 or 2.4 pct, according to a report in Financial Times Deutschland that cited sources within the institutes. The institutes are scheduled to release their Autumn forecasts this Thursday. In their Spring report, released in April, the institutes estimated GDP growth of 1.8 pct, revised upwards from the 1.2 pct they had previously forecast. The newspaper also reported that German economic minister Michael Glos will raise the government's GDP forecast to 2.4 pct for 2006, compared with its earlier forecast of 1.6 pct. The government will make this forecast official on Friday and it will be used to calculate the government's tax income estimates in early November, the report added. According to preliminary calculations by the newspaper, the German government expects to collect 50 bln eur more in taxes in 2006 than 2005. This would put the ratio of the national debt versus GDP at 2.3 pct. The figure is lower than both the 2.6 pct figure that Finance minister Peer Steinbrueck had officially given the EU Commission, and the EU's stability and growth pact ceiling of 3 pct. The six leading economic institutes are the Deutsche Institut fuer Wirtschaftsforschung (DIW), the Hamburgische Welt-Wirtschafts-Archiv (HWWA) Institut, the Kieler Institut fuer Weltwirtschaft, the Rheinisch-Westfaelisches Institut fuer Wirtschaftsforschung (RWI), the Institut fuer Wirtschaftsforschung Halle (IWH) and the Institut fuer Wirtschaftsforschung (IFO).