Monday, August 23, 2010

Latest German 2010 forecast is for growth of 3.4%; Sweden raises forecast to 4.5%; French 2010 growth forecast at 1.4% - - 2011 downgraded

The latest German forecast is for growth in 2010 of 3.4%. Sweden has raised its forecast to 4.5% while French growth in 2010 is forecast at 1.4% and 2011 has been downgraded.

The German Chamber of Commerce and Industry (DIHK) is forecasting that the German economy will grow by a record 3.4% this year, its head, Martin Wansleben, said on Saturday. Last Thursday, the Deutsche Bundesbank, Germany's central bank, revised up its 2010 forecast to 3% after the economy grew at an annualised rate of almost 9% in the second quarter..

"The recovery is expanding,"
Wansleben said in an interview with the news magazine Der Spiegel, which is to
due to be published on Monday. Businesses are investing again and "even consumption is accelerating thanks to favourable developments in the labour market," he added.

German Finance Minister Wolfgang Schäuble said in an interview with the Rheinische Post regional newspaper, that was published at the weekend, that the budget deficit in 2010 may fall from a previously expected level of €65bn to €60bn.

The central bank said on Thursday that the budget deficit would be below 5% of GDP (gross domestic product) in 2010.

Sweden’s centre right government, which is facing an election on September 19th, raised its economic growth forecast on Friday to 4.5% in 2010, up from an early July prediction of 3.8%.

“Gross domestic product growth is high,” Finance Minister Anders Borg said in a statement. “But the risks are still high, especially if one looks at the world around us where many countries have very big problems with their public finances. The government therefore wants to continue to be careful. Returning to
surpluses is our highest priority to defend Sweden against new threats.” 

Sweden's 2010 budget deficit is forecast to be the lowest in the European Union this year at 2.1% of GDP.

French President Nicolas Sarkozy on Friday announced a reduced growth forecast after a meeting of ministers to discuss the economy.

The government kept its target growth  rate of 1.4% this year and cut its 2011 forecast from 2.5% to 2.0%.

Sarkozy confirmed the goal to meet the 2011 deficit target of 6.0% but he ruled out any income tax increases.

To meet its 2011 budget target, the government plans to cut  €10bn in tax breaks to offset slower growth.

We are adding news stories to the blog system as  we await a glitch in the news database to be rectified  on Mon, Aug 23rd.

News stories up to Friday Aug 20th are accessible from here:

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