The IMF has cut its forecast for German growth next year to 1.75pc from 2.0pc, according to its latest report on Europe's largest economy. The forecast is more optimistic than those of Germany's six leading economic institutes, which last week said the German economy would expand by just 1.4pc in 2003. The government is due to publish its own new forecast on Thursday.
German daily Handelsblatt, citing a copy of the unpublished IMF report, said the orgainsation also criticised the governing coalition's controversial fiscal policy plans for 2003, which it says "are a significant burden for the economy in a time of cyclical weakness and uncertainty".
It left its GDP growth for this year unchanged, at just 0.5pc, Handelsblatt said. The euro is weaker this morning, down 0.15c to 98.30c against the dollar, although it continues to hold above 98c following overnight losses on Wall St. The US equity tumble is helping to offset yesterday's Ifo index, which fell for the fifth consecutive month in September//www.fxcentre.com