The German government has slashed its official growth forecasts for this year and next, predicting that the economy would stagnate this year and grow by 1.5% to 2% in 2004.
'Given the difficult economic situation in the first half of 2003, the government expects real gross domestic product growth to average zero for the whole of the year,' the Economy and Labour Ministry said in statement.
It added, however, that 'important indicators' had been pointing to a recovery for some time, and it was expecting a slight rise in economic activity in the second half of this year.
Previously, the German government had predicted GDP growth of 0.75% this year and 2% next year, but had been widely expected to cut its forecasts to bring them in line with the prognoses of most economic experts.
