The German government has revised its growth forecast for the national
economy in 2011, raising it half a% from its prediction in October. In
2010, the German economy grew at the fastest pace since reunification. Also
today, it was reported that food prices increased substantially in 2010.
The German government has raised
its growth forecast for the national economy this year to
2.3%, an upward revision from the 1.8% it predicted in
"2011 will be a good
year, too," said Rainer Brüderle,
Federal Minister of Economics and Technology, announced in
Brüderle said that while
growth will continue at high rates in the developing world,
the pace of recovery in developed countries is likely to
slow this year. Growth will be supported by increasing
domestic demand, which the government sees rising by 2.0%,
and private consumption, forecast to rise 1.6%
"Private consumption will therefore be driving growth,"
If the forecast holds, it
would be lower compared to 2010, when the economy expanded
by 3.6% in 2010, the fastest rate since reunification in
The forecast for 2011 would
also indicate the German economy had returned to its
The government says it also
expects that unemployment will drop to 7% compared to 7.7%
last year with unemployment falling below 3 million -
- the lowest since the early 1990s.
Today, the federal statistics office,
Destatis, reported that the index of producer prices for
industrial products (domestic sales) for Germany rose by 5.3% in December 2010
from the corresponding month of the preceding year. In November and October
2010, the annual rates of change were +4.4% and +4.3%, respectively.
Compared with the preceding month, the index rose
by 0.7% in December 2010 (+0.2% in November 2010).
On an annual average in 2010 the index of
producer prices for industrial products rose by 1.6% from the previous year. A
year before the index had fallen by 4.2%.
Also today, Destatis reported that food prices
increased substantially on a year earlier. The news coincides with the 2011
International Green Week Berlin, that food prices in December 2010 were up 3.6%
on December 2009. The strongest increase in food prices was thus observed at the
end of the year.