国际英语新闻：German economy to increase 3.5 percent in 2010

BERLIN, Oct. 14 (Xinhua) -- German economy will rise 3.5 percent in 2010 and 2 percent in 2011, as unemployment rate falls to 7 percent next year, leading economic institutes said on Thursday.

Eight economic institutes selected by the German government together issued their two-year report, saying, "German economy is on an upward track to make up for the fall in production caused by the crisis."

Growth is expected to slow down due to the cooling of global economy, but it is still healthy, and domestic consumption will become a shining point, the report said.

"Domestic consumption and investment has witnessed significant acceleration," the report said, influenced by surging exports since 2010.

The people out of work are expected to fall below 3 million in 2011, the lowest level since 1992, which will push domestic consumptions to see a "noticeable rise for the first time in several years."

The German government deficits are also expected to fall to 2.7 percent of GDP in 2011, as the government's stimulus program fades out and serious budget saving plan takes effect.

Then Germany will become the first major EU nation to realize the goal of limiting government deficits within 3 percent of GDP, while Spain and France both forecasted their deficits would be 6 percent of GDP in 2011 and Italy predicted 3.9 percent.

The report supported the spending cut plan adopted by the eurozone country governments since the Greece crisis, saying, the threat of this measure to the growth is "unfounded."

It also emphasized the importance of healthy financial frameworks in countering the world crisis.

"It has been shown clearly that only countries with good financial systems can master global economic or financial crisis," the report said.

The better predictions from economists also cheered the German government, whose popularity has sunk to its lowest level in a poll published on Wednesday.

German Chancellor Angela Merkel said, "the figure for this year is impressive," and the 2 percent of increase next year means the growth is "sustainable."

She also warned the risks in German recovery and stressed the importance of taking right policies to maintain the recovery.

Merkel said government has adopted right measures against the crisis by first implementing stimulus program and now planned to take serious consolidation plan.

She asked world leaders to realize the agreement they made in June to halve richer countries' government deficits by 2013, as "a good stability culture on budgets and finance is not only necessary for Europe, but also for the world."

German economy has suffered its worst recession after World War II in 2009 by 4.7 percent due to the world financial crisis started in September 2008.

The German government will release its own predictions for the economic growth on October 21. It was expected to raise from its former forecast of 1.4 percent this year, influenced by today's expectations.

The 8 economic institutes are divided into 4 cooperating groups. They are Munich's Ifo institute with the KOF institute in Zurich, the IfW institute in Kiel with the ZEW Center for European Economic Research, the IW Halle institute with Kiel Economics and Research Forecasting, and the RWI Eseen institute with the Institute for Hoehere Studien in Vienna.