Germany's BDB banking association said today it saw some slight improvements in the economic outlook recently but said the three-year-long period of stagnation would only slowly be overcome.
The association of German banks said in its September report on the economy it expects gross domestic product to grow by just 0.1 per cent in 2003 and rise by at least 1.5 per cent in 2004 - which a spokesman said was unchanged from a previous forecast.
"There has never been such a prolonged weak growth phase in post-war German history," the association said, referring to three years of growth of less than 1 per cent.
"But in the meantime, some brighter colours are appearing on the economic horizon. As far as sentiment indicators in recent months are concerned there has been a clear turnaround and the first signs of recovery can also be seen in the manufacturing orders and industrial production."
The banking association said it saw the recovery only slowly gaining pace.
"At the same time the three-year-long stagnation phase in Germany will only slowly be overcome," it said. "Supporting this view is the fact that the sentiment indicators are still at a comparatively low level."
The BDB said growth in the second half of 2003 should pick up slightly. It said it saw no improvements in the labour market until 2004 at the earliest, and growth would have to reach at least 1.5 per cent before a significant number of jobs would be created.
The BDB renewed its growth forecast for the euro zone of 0.5 per cent this year and 2 per cent in 2004. "The economy of the euro zone passed through its low point in the second quarter," it said.