The western German economy has bottomed out, but is stagnating and not turning around quickly, the Federation of German Banks said.
''The economic situation in west Germany has stabilized in recent months. The bottom has been reached, but it has not yet been left," The banks said in a report on the economy.The economy will eventually get a boost from lower interest rates, but ''lower interest rates alone cannot spur companies' investment activity," they said. Germany's export-driven economy would not get a boost from foreign orders as economic growth abroad was still too weak.
"In addition, the effects on exports of the appreciation of the mark in the European Monetary System have not been incorporated at all yet," The banks said.
The banks said a forecast of 1 percent growth next year by five of Germany's six leading research institutes was "fairly optimistic.