Germany's DIW sees economy expanding, with fewer jobs

A leading German economic institute has said it's confident the German economy will pick up momentum again in 2013. But it warns that more people will be out of work as a result of the protracted euro crisis. The Berlin-based German Institute for Economic Research (DIW) said on Tuesday it expected 1.6 percent growth for the domestic economy in 2013, after only 0.9 percent throughout the current year. "Production and orders will keep slowing down at the beginning of next year," said DIW's Ferdinand Fichtner. "The main risk for Germany's export-oriented economy will still be the ongoing debt crisis in the euro zone." But Fichtner added things would improve as the year progressed, with major fiscal measures in important emerging countries such as Brazil and China expected to positively impact global trade. Tax windfall The think tank warned that about 140,000 jobs could be lost in 2013, bringing the jobless total to over 3 million people again. It would mark the first annual rise in unemployment since 2009. Fichtner commented that despite the ongoing debt crisis many companies would bend over backwards to keep their workforce, although short-time work schemes might be introduced in many of them. But companies were afraid of losing highly qualified labor which would be hard to find again when the crisis was over. DIW Analyst Kristina van Deuverden told the German business daily Handelsblatt that the federal state and communities would most likely secure a record 601.5 billion euros ($777 billion) in tax revenue this year. She said the figure could even swell to 620 million euros in 2013 due to the relatively robust German labor market and tangible wage hikes in many sectors.