Hanover, Germany - Despite the threats posed by slowing global economic growth, resurgent inflation and a surging euro, German industry set out Monday optimistic forecasts for Europe's biggest economy.

"We continue to see robust and positive sentiment in (German) industry," said Juergen Thumann, president of Germany's powerful federation of industry (BDI), adding that the nation's growth rate could come in at 2 per cent this year.

This is more than the raft of other economic projections released in recent weeks with some economists saying Germany will be lucky to grow by 1.4 per cent this year with slumping global growth and a strong euro undercutting exports and rising inflation hitting private consumption.

But speaking at the world's biggest industrial trade fair in Hanover, Thumann said the German economy had enjoyed a good start to 2008.

"The BDI believes that a growth rate of up to 2 per cent is still achievable in 2008," said Thumann.

The German economy grew by 2.5 per cent last year after emerging in 2006 from a protracted period of stagnation to post a 2.9 per cent expansion rate.

Echoing the BDI's projections, the Cologne-based Institute for the German Economy (IW) released a survey showing about 46 per cent of companies remained optimistic that the nation's economic performance would remain dynamic this year and in 2009.

The survey by the IW, which has links to German employers, was based on the responses of 2,000 companies.

The positive mood is also reflected in reports issued by leading German industry sector associations with the nation's steelmakers saying Monday their business year had got off to a good start.

"We have started 2008 with a swing," steel industry federation president Hans Juergen Kerkhoff said at the Hanover trade fair.

At the same time, Europe's biggest carmaker German-based Volkswagen AG said worldwide auto sales bounded ahead by 7 per cent this month.

Germany's Finance Ministry also said Monday that while the nation's economy is likely to lose momentum this year it could have grown at a faster pace than was previously expected. "Economic forces still prevail," the ministry said in its monthly report.

Either way, the BDI forecast adds to hopes that the German economy might manage to withstand the fallout from the world economic slowdown triggered by the US mortgage market crisis and to help steer Europe along an economic growth path.

"Every day companies in Germany create more than 1,000 new jobs," said Thumann who sees corporate investment as being a key driving force behind economic growth this year.

"Industrial orders and production are at a high level," said Thumann. "Also foreign trade continues to deliver good news despite the strong euro," he said. (dpa)