Allianz predicts massive German recovery in 2010

Germany's insurance giant Allianz foresees a massive recovery for the country's economy this year, with growth exceeding official forecasts and unemployment rising only marginally.

The daily Bild quoted the group's chief economist Michael Heise as saying that growth would reach 2.8 per cent, comfortably above the German central bank's prediction of 1.6 per cent and the strongest since 2006.

Heise said the good performance would be spurred by a boom in exports, stable domestic consumption, government recovery programmes and tax cuts recently agreed by the ruling centre-right coalition.

He also forecast that 2010 would not see the widely feared mass lay-offs in industry, and unemployment would stay well below the symbolic four million level.

While the Bundesbank has predicted 4.2 million jobless by 2011, Heise said they would not exceed 3.67 mn, some 240,000 more than at present.

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