Report: Germany to Cut Growth Forecast

The German government is set to downgrade its growth forecast for the current year to 1.0-1.2 percent from 1.6 percent at present, the daily Süddeutsche Zeitung reported Friday, quoting government sources. That is still more optimistic than most forecasts, with many experts penciling in growth of less than 1.0 percent -- the International Monetary Fund and the European Commission have both recently slashed their German growth forecasts for 2005 to just 0.8 percent. And while some experts in the finance ministry are also skeptical that the one-percent level can be obtained, Berlin, scheduled to publish its latest updated forecasts on April 29, is to keep its new forecast above one percent for psychological reasons, the newspaper said. A spokesman for the economy ministry rejected the report.