New Delhi: The International Monetary Fund (IMF) has reduced Germany’s 2008 global growth forecast to 1.5%, compared to its original 2.5% prediction that was made in 2007.
Analysts comprising the IMF’s Executive Board indicate that while the European country has performed well in the last few years, there are challenges that lie ahead. According to IMF officials, Germany in the short-term would have to dispense much of its energies and resources in dealing with the subprime-related banking problems. They will also have to contend with the possibility of growth taking a further dip.
Germany dips 2008 global growth forecast
In the long-term however, challenges will include raising productivity levels and potential growth to preserving existing gains. To meet some of these challenges, the Board has recommended Germany to look at maintaining short-term stability, particularly in the financial sector and to improve its banking sector by allowing private capital to play a more expanded role.