German economic institutes raise GDP growth rate
Germany's six leading economic institutes stated that they have raised their GDP (Gross Domestic Product) forecast for 2004 to 1.8% from 1.5%, after the German economy grew strongly in the first half due to the increase in exports. On the other hand, economic growth is expected to slow to 1.5% in 2005 as global demand for German goods wanes and domestic demand develops gradually. The slowdown is attributed to the modest increase in private consumption. Economists estimate private consumption to advance early next year, when the tax cuts take effect and the outlook for the labour market starts to improve.