German Economy Minister Wolfgang Clement said growth in 2004 could outstrip the government’s forecast of 1.5% as economic data testifies to a strengthening recovery.

“In my view that can definitely be the case,” Clement told reporters in Berlin when asked if growth could eclipse the government’s prediction.

Surging exports helped Germany’s economy to grow by 0.4% quarter-on-quarter in the first three months of 2004, confounding expectations, while April data showed industrial orders and output rising at well over double forecast rates.

“The facts make me confident,” Clement said.

German trade figures for April showed exports continuing to increase strongly on the year as solid global demand defied fears the euro’s appreciation against the euro over the past year could hurt the export sector.

The DIW economic research institute, whose 2004 annual growth forecast for Europe’s largest economy is lower than the country’s other leading institutes, doubled its prediction for second-quarter growth to 0.6%.

“It would be nice if this optimism took hold in Germany,” Clement said, referring to the DIW’s revised forecast.

Despite the positive data, economists say that weak domestic demand will not pick up until the economy begins creating new jobs. Seasonally adjusted unemployment has risen steadily this year and has held at 10% or above since October 2002. (Reuters)