The German government is split over whether it should lower its 2003 GDP growth forecast to 1.0pc. A dispute has reportedly erupted between the finance and economy ministers over whether to lower the official forecast for 2003 economic growth. According to Handelsblatt newspaper, finance minister Hans Eichel is in favour of cutting the forecast to 1.0pc, but economy minister Wolfgang Clement is defending the current 1.5pc outlook.
Meanwhile, Die Welt newspaper reported today that the government will cut its 2003 growth estimate to 1.0pc in its annual report on the economy, due on 29 January. The government has stuck to its 1.5pc forecast for 2003 despite the fact that the country's six leading economic institutes have all slashed their outlook for growth to no more than 1pc. Cabinet members in favour of cutting the outlook fear a repeat of last year's problems, when the government was accused of lying about the health of the economy until after the general election in order to remain in power. Chancellor Gerhard Schroeder's ruling centre-left coalition won the September elections by one of the narrowest margins in German history. //www.fxcentre.com