Germany's council of economic advisers have slashed their forecast for 2002 gross domestic product growth (GDP) to just 0.2 per cent from an earlier target of 0.7 per cent, a newspaper reported today.
The Handelsblattbusiness daily said the "five wise men", the government's independent council of economic advisers, also made their first GDP prediction for 2003 - growth of one per cent.
The five advisers also forecast the government's budget deficit will exceed the three percent of GDP threshold in 2003 as well as in 2002.
They said the deficit will be 3.3 per cent in 2003 after hitting 3.7 per cent in 2002 - exceeding the European Union's three per cent limit. The fiscal conditions in Germany have not been "as dramatic as this in many years," the council said in the report to be handed to Chancellor Mr Gerhard Schroeder today.
The forecasts are due to be officially released at 10:30 a.m.