The Federation of German Banks (BdB) cut its forecast for German economic growth in 2001 today to 2.2 per cent after growth turned out to be far weaker than expected in the second half of last year.
The BdB, which represents leading commercial banks, noted that its view was significantly below German finance minister Mr Hans Eichel's own forecast of growth of at least 2.6 per cent.
"Under these circumstances growth of 2 per cent is hardly stunning but it is all right," said HypoVereinsbank chief economist Mr Martin Huefner, who headed the panel which drafted the BdB's forecast.
"We are nevertheless disappointed that it has not been possible to keep up with the pace of European growth. France and Italy have clearly overtaken us in recent months."
A major drag on Europe's largest economy remains the construction sector where investment is expected to fall by 1 per cent this year after a drop of 2.5 per cent last year.
German inflation should average 2.0 per cent this year - in line with the European Central Bank's monetary policy target - after 1.9 per cent in 2000.