GERMAN RESEARCH INSTITUTE LOWERS GROWTH FORECAST The DIW economic research institute said West German economic growth in 1987 is unlikely to reach the 1.5 pct rate it had forecast earlier this year. The institute, whose forecasts are more pessimistic than those of the other four leading German institutes, said the economy had passed its peak in the summer of 1986, and its prospects had dimmed significantly since the autumn. The DIW repeated earlier predictions that gross national product (GNP) in the first quarter of 1987 would contract in real, seasonally adjusted terms against the weak final quarter of last year. The DIW said that even if the economy recovers in the remaining three quarters, it was unlikely that demand and production would rise strongly enough to bring GNP growth up to 1.5 pct. Other institutes and economists have recently revised their forecasts for German 1987 growth to around two pct. In a report DIW disputed arguments by other economists that the economy was showing mixed development, with domestic demand healthy but foreign demand weak. DIW said the crucial split was between weak demand for capital goods, and strong demand for buildings and consumer goods, not between foreign and domestic demand. It noted that domestic demand for capital goods had been hit in recent months by the weakness of exports, which had caused West German firms to scale back investment plans. Service industries, unlike manufacturing industry, were continuing to do well because they relied on consumer demand, it said. In a separate report the HWWA economic research institute in Hamburg said West Germany's real trade surplus would fall markedly this year. However, the nominal trade surplus would show little change from 1986's record 112.2 billion marks because of a further improvement in the terms of trade on average in 1987 compared with 1986, it said.