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REVISED FORECAST FOR EAST GERMAN GROWTH

 REVISED FORECAST FOR EAST GERMAN GROWTH
 FRANKFURT, Germany, Oct. 15 /PRNewswire/ -- Deutsche Bank


Research predicts that east German GDP growth will amount to a disappointing 4 percent in 1992, mainly due to the 30 percent decline in east German exports to eastern Europe recorded so far this year.
 In 1993, however, the institute concludes that continued strength in the service and construction industries, as well as productivity yields from recently completed investment projects, should help east German GDP growth reach 8 percent.
 East German exports to eastern Europe fell by 60 percent in 1991, contributing to a 33 percent fall in GNP that year. At 32 percent of the average west German level, worker productivity also remains low in eastern Germany. In 1991, the entire region was responsible for only 6.9 percent of Germany's GNP.
 Since unification, investment per worker has risen to 80 percent of the west German level. Nevertheless, eastern Germany is still sorely in need of capital stock. For 1993, DB Research expects real capital investment growth of 20 percent.
 Dependence on fragile trade ties to the East remains high in machinery and equipment construction, light and heavy industry, ship building, vehicle construction and chemical production, all of which constitute the core of east German industry. Between 1988 and 1992, for example, the east German machinery industry increased its dependence on trade with the former Soviet Union from 50 percent to 70 percent, even as total contracts shrank from DM 15 billion to DM 5 billion.
 DB Research sees signs that trade with the East may recover somewhat in 1993. In September of this year, the government moved to support weakening trade relations with the former Soviet Union. Features of the program include insuring barter trade with the CIS, financing special investment projects, and allowing the use of energy and raw material reserves from the CIS to finance the purchase of supplies from eastern Germany.
 For a copy of the complete texts, "Crisis in Germany's Trade with Eastern Europe " and "East Germany: Adjustment Crisis Continues," please contact Ute DeFarlo, TransAtlantic Futures, Inc., Washington, D.C., phone: 202-462-1222; fax: 202-462-1229.
 -0- 10/15/92
 /CONTACT: Rutger Teuscher, 011-49-69-71007-232, or Rainer Veit, 011-49-69-71007-226, both of Deutsche Bank Research in Frankfurt/ CO: Deutsche Bank Research ST: IN: FIN SU:


MH -- DC011 -- 0374 10/15/92 11:30 EDT
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