BERLIN, April 18 (Reuters) - Germany's leading economic institutes said on Thursday domestic demand would drive a 0.8 percent expansion in Europe's largest economy this year and that this would more than double to 1.9 percent in 2014 as exports picked up.
The institutes also said that while it may seem appropriate for the European Central Bank (ECB) to cut interest rates, given weak regional growth, this would only serve to delay necessary restructuring in the banking sector.
'An upwards tendency re-emerged in the German economy in spring 2013,' the institutes said in their twice-yearly report. The German government commissions the joint report by four institutes, Ifo, IWH, IfW and RWI, which then flows into its own growth forecasts.
The institutes said the downward revision to 2013 growth from a previous forecast of 1.0 percent made last October was due to the fact that the economy had to catch up this year after contracting in the fourth quarter of 2012. This statistical effect masked the true strength of German growth, they said.
(Reporting By Sarah Marsh, editing by Gareth Jones) Keywords: GERMANY ECONOMY/INSTITUTES
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