BERLIN Thu Oct 9, 2014 5:05am EDT
BERLIN Oct 9 (Reuters) - Leading economic institutes slashed their forecasts for German growth to 1.3 percent for this year and 1.2 percent for 2015 on Thursday and urged measures to boost growth and investments, saying Germany's public finances had room for manoeuvre.
"The most important job for economic policy in this field is to boost growth and create the right conditions for investment. There is some room for manoeuvre for constructive finance policy," they said, pointing to taxes and public spending.
The institutes, whose analysis flows into the government's forecasts, had previously predicted Europe's largest economy would expand by 1.9 percent in 2014 and 2.0 percent in 2015.
Raising their forecasts for German unemployment and lowering the outlook for inflation and net borrowing, they said European Central Bank measures to buy bonds and asset-backed securities would provide only a limited boost to growth in the euro zone.
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