FRANKFURT--Economic growth in Germany and the eurozone next year
could outpace current forecasts, which don't fully reflect the
decline in oil prices, Jens Weidmann, president of the Deutsche
Bundesbank and a member of the European Central Bank's governing
council, says in an interview published Sunday.
"As things currently stand and if the oil price remains at
current low levels, inflation will be even lower than forecast but
growth will be higher," Mr. Weidmann tells Sunday newspaper
Frankfurter Allgemeine Sonntagszeitung.
"Our current economic forecasts don't yet fully reflect the
decline in the oil price, which has fallen some 25% since the
cut-off date," Mr. Weidmann says. The substantial slump in the oil
price will cause lower prices for a number of goods because of
lower production costs, and simultaneously stimulate the economy,
Mr. Weidmann says.
Earlier this month, the German central bank halved next year's
German growth forecast to 1% from 2%.
Due to the low oil price, the German government also expects
growth in the eurozone's largest economy to get a boost of between
0.2 and 0.3 percentage point next year, weekly magazine Der Spiegel
reports Sunday, citing an internal note from the German Economics
Ministry. Because of the oil price decline, the German government
will pay some 12 billion euros ($14.6 billion), or almost 25%, less
to oil-producing countries next year than in 2014, and the ministry
expects the oil price to hover at low levels for several years,
according to the report. A ministry spokeswoman declined to comment
on the report.
Mr. Weidmann also reiterated his opposition to plans by the ECB
to buy government bonds to stimulate the eurozone economy, saying
such measures aren't needed considering the area's economic
prospects, as long as falling prices don't lead to second-round
effects such as on wages.
Write to Frankfurt bureau at djnews.frankfurt@dowjones.com