Feb. 13 (Bloomberg) -- Wolfgang Wiegard, head of the German government's panel of economic advisers, may lower his forecast for German economic growth in 2004 if the euro rises above an average of $1.25 this year, the Frankfurter Allgemeine Zeitung newspaper said, citing Wiegard.

The appreciation of the euro is the main threat to the panel's forecast of 1.6 percent growth in Europe's largest economy this year, said Wiegard, who expects a pickup in global trade to more than offset the currency's rise.

Wiegard also said the wage agreement for about 3.5 million engineering workers brokered yesterday by the IG Metall labor union and the Gesamtmetall employers' organization has no negative consequences for growth and employment.

An expansion in the U.S. and Asia led Germany out of a first- half recession in the second six months of last year. The reliance on exports, which account for about a third of the economy, means the euro's 18 percent gain against the dollar in the past year poses a risk to the recovery.

(Frankfurter Allgemeine Zeitung 2-13 15)

To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net

Last Updated: February 13, 2004 02:32 EST