BERLIN, April 25 (UPI) -- Germany's biggest industry group has raised its economic growth forecast for 2006.
At the Hanover Messe, the world's biggest industrial fair, the German Industry Association BDI upped its growth expectation for 2006 from 1.5 percent to 1.8 percent.
"With a bit of luck, we can also reach 2 percent," BDI head Juergen Thumann said, according to Tuesday's Frankfurter Allgemeine Zeitung newspaper. "We hope for (increased domestic consumption) and we trust in the reform promises of the federal government."
In 2005, Germany's economy grew by .9 percent; it is still suffering from high unemployment, with just under five million jobless.
The BDI bases its elevated expectations on further growth in Germany's traditionally strong export sector, which it expects to rise by another 7 percent.
However, he said, Chancellor Angela Merkel and her right-left government now had to deliver on the promised reforms. If not, the morale boost that was sparked by the change in government will fade, Thumann said.
And not all institutions are as optimistic as the BDI. The International Monetary Fund expects the German economy to grow by only 1.3 percent in 2006.
Those numbers could even fall for 2007, when Merkel plans to raise the added-value tax by three points to 19 percent.
