IMF set to rap German government
Tuesday, 29 October 2002The International Monetary Fund is to lower its economic growth forecast for Germany in 2003 to 1.75% from 2% and is critical of Berlin's budget policies, German newspaper Handelsblatt reported this morning.
The revised forecast is to be published in the coming days when the IMF releases a study on the German economy, the newspaper said. The IMF's current forecast was released on September 25.
For this year, the IMF continues to forecast growth of 0.5% for the German economy, the newspaper said.
The Fund also expected Germany's public deficit to swell to 'close to 3.5%' of gross domestic product this year, according to Handelsblatt.
The multilateral financial institution is to take a hard tone against the budget policies of Chancellor Gerhard Schroeder which calls for a tax rise and spending cuts in order to achieve balanced public finances by 2006, the newspaper said.
The IMF judged that the strategy risked further slowing the German economy's already weak growth.
