BERLIN (MktNews) - The German Chambers of Commerce and Trade DIHK on Tuesday cut its 2003 GDP forecast to 0% from 1%, saying it saw stagnation in the German economy. "Given the bleak outlook for the German economy, we cut our foreca7Fst from 1% to stagnation," DIHK's managing director Martin Wansleben told reporters at a press conference.
He stressed that the DIHK fears that Germany would not be able to keep the 2003 public sector deficit below the 3% of GDP ceiling requ7Fired under the EU's Stability and Growth Pact if the Government does not push ahead with the required structural reforms. "The finance ministry and public sector budgets won't be able to meet the deficit criteria if nothing happens," he said7F.
In other comments, DIHK's chief economist Axel Nitschke said "there is increasing leeway for the ECB to cut interest rates." In case of an Iraq war, Nitschke said that he expected the ECB to trim its interest rates immediately and in case 7Fof a longer war he said the ECB should then cut rates again. //www.marketnews.com