German economy has spring in step: Institutes

BERLIN: Germany's leading economic institutes released a more upbeat report on prospects for Europe's biggest economy on Thursday, raising their growth forecast and projecting lower unemployment.

For 2010, the five institutes expect an expansion of gross domestic product (GDP) of around 1.5 percent, up from their previous projection of 1.2 percent and slightly above the government's forecast of 1.4 percent.

They said the average rate of unemployment was expected to fall to 8.1 percent this year from 8.2 percent in 2009.

"The recovery in the world economy is progressing this spring, gradually recovering from the financial and economic crisis of 2008 and 2009," said the report, one of two published by the institutes every year.

The global recession pushed Germany, the world's second biggest exporter after China, into its worst downturn since World War II last year, with GDP dropping five percent.