German Government Lowers Growth Forecasts

In a sign that Europe's largest economy is recovering more slowly than expected, the German government will lower its growth forecasts for 2003 and 2004. The government will say the economy will expand by about 0.25 percent this year, after coming out with a prediction of 0.75 percent in April, according to an official who did not want to be named. Forecasts for 2004 have also dropped. Six months ago the government said expansion next year would be around 2 percent. The new figures for 2004 are between 1.5 and 1.75 percent. Germany has been stuck in an extended period of sluggish or almost non-existent growth. The economy has expanded by less than 1 percent for each of the past two years, and, as a result, unemployment skyrocketed to a four-and-a-half-year high earlier this year.