UPDATE 2-German fin minister warns against recession talk

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BERLIN, July 19 (Reuters) - Growth in Europe's biggest economy could beat forecasts for this year and although 2009 will be weaker there should be no talk of recession, German Finance Minister Peer Steinbrueck said on Saturday.

In an interview with Welt am Sonntag Steinbrueck warned against creating nervousness by talking about the prospects of recession in Germany.

"It is possible that the conservative forecasts for 2008 will be exceeded slightly. And of course 2009 will be weaker," he said according to a transcript of the interview.

"But please, not this typically German talk of recession. We have every reason not to make people insecure," he said, adding: "We are not in a situation in which we have to develop crisis scenarios."

The finance ministry expects German growth of 1.7 percent this year, down from 2.5 percent last year. It has forecast expansion of 1.2 percent for next year.

But economists are getting increasingly worried about the outlook.

The head of Germany's IW economic institute told Bild am Sonntag newspaper declining orders and production pointed to a dampening of the economy and he said he expected no significant drop in unemployment next year.

"In 2009, we will only be able to grow by about 1 percent," IW Director Michael Huether told the paper.