MADRID, July 23 - The Spanish government is set to reduce its 2003 economic growth forecast to 2.5 percent from 3.0 percent, delaying the prediction of an economic recovery for another year, a newspaper report said on Wednesday. La Vanguardia said the government's new target is expected to be given later this month with the announcement of the economic guidelines on which the 2004 budget is based. Spanish gross domestic product (GDP) rose only 2.0 percent last year, compared with 2.7 percent in 2001 and more than four percent a year from 1998 to 2000.
The Economy Ministry said earlier this month that growth should speed up in the second half of this year as an acceleration in domestic demand compensates for slower growth in construction. The economy grew 2.1 percent in the first quarter of this year and the government has so far stood by its six-month-old forecast of three percent growth for the year as a whole but has said it may revise that down in July.//