Germany's finance minister, Theo Waigel, said GDP might fall again

Germany's finance minister, Theo Waigel, said GDP might fall again in the first quarter of this year, but said this did not mean the economy was in recession. Separately, one of Germany's respected research institutes, the IWH in Halle, said conditions had not worsened since the new year. It predicted 1.5 per cent growth in 1996, making it relatively optimistic.

The Bundesbank's chief economist said the acceleration in M3 growth reported on Wednesday would not change the central bank's view about the potential for a cut in interest rates, restoring hopes that this might happen after next Thursday's council meeting.