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UPDATE 1-German govt to lift 2010 growth target to 1.4 pct

Published 01/25/2010, 01:48 PM
Updated 01/25/2010, 01:51 PM

* German govt grows slightly less optimistic in last 2 weeks

* 2010 GDP growth forecast to be raised to 1.4 from 1.2 pct

(Adds background)

By Gernot Heller

BERLIN, Jan 25 (Reuters) - The German government will adjust its 2010 growth forecast to a final target of 1.4 percent from a previous official aim of 1.2 percent, a government source with knowledge of the forecast told Reuters on Monday.

But the 1.4 percent target for gross domestic product growth in 2010 will be slightly less optimistic than the figure of 1.5 percent that government sources told Reuters was in an earlier draft of the 2010 economic forecast two weeks ago.

"It will only be 1.4 percent," the source told Reuters on Monday.

Economy Minister Rainer Bruederle will announce the revision to 1.4 percent on Wednesday. Bruederle said earlier this month growth in the first quarter of this year could be close to zero.

Many private institutes are forecasting growth of 2 percent for 2010.

Germany emerged from its deepest post-war recession in the second quarter of 2009 but more recent data points to a stuttering recovery in Europe's largest economy.

The GfK market research group said on Monday that German consumer sentiment is likely to fall going into February as worries over unemployment weigh.

The consumer sentiment indicator, based on a survey of about 2,000 Germans, fell to 3.2 for February from a revised 3.4 in January. January's reading had been initially reported as 3.3.

The forward-looking indicator registered its fourth consecutive monthly drop but was slightly above a forecast for 3.1 made by economists polled by Reuters .

(Editing by Ron Askew)

(Reporting by Gernot Heller; writing by Erik Kirschbaum)

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