GERMAN BANKS SAY UNCERTAINTY ABOUT ECONOMY GROWING
Uncertainty is growing about the prospects
for the economy as orders for industry fall and companies scale
back investment plans, the German Savings Banks and Giro
Association said.
    Exporters expect foreign demand to remain weak, while
industry is less optimistic than it was, the association said
in a report.
    However, last month's agreement among the six leading
western industrialized countries to keep currencies around
present levels was expected to be a stabilizing influence for
exporters, it added.
    The banking association said the possibility of using
monetary policy to stimulate the economy should not be
overestimated.
    Another small drop in already low interest rates could not
be expected to cause any significant rise in purchases of
consumer or capital goods, it said.
    The Bundesbank's half-point cuts in the discount and
Lombard rates in January have largely exhausted the scope for
any further monetary moves, the association added.
    On Tuesday the Federal Statistics Office said gross
national product stagnated in real, seasonally and calendar
adjusted terms in the fourth quarter of 1986 compared with the
third quarter.
    The Economics Ministry, commenting on the figures, said GNP
in the 1987 first quarter was also expected to be relatively
weak.
    Bank economists have forecast the economy will either
stagnate or contract slightly in the first quarter. Official
first-quarter figures are due in early June.
 REUTER
