Tuesday, April 26, 2005

Don't bet on the economy , Schroeder.

Germany: Bad news all around for Schroeder.

April 26 (Bloomberg) -- German Chancellor Gerhard Schroeder may be ill-advised to rely on forecasts of accelerating economic growth and shrinking jobless lines to help him win a third term in next year's elections, an economist at the Ifo institute said. ``The economic outlook the government will be facing just before the election will not look particularly good,'' Gebhard Flaig, head of Ifo's department of economics and finance, said in an interview in Berlin. Germany's six leading economic institutes, which include Ifo, said today Europe's largest economy is suffering from ``fundamental weakness.'' The institutes slashed their forecast for German growth this year in half to 0.7 percent and predict an acceleration in 2006 to 1.5 percent.

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