German government sticks to growth forecast

The German Finance Ministry's monthly report holds to its forecast that the economy will grow 0.75% this year and 2% next year.

The ministry said the German economy had stagnated in the first-half but there are signs of recovery in the next four months.

It also said that the gradual recovery in the world economy will have a positive impact on Germany.

It said its financial plan for 2003-2007 is still based on the assumption that real growth is 2% next year and 2.25% in the subsequent years.

Economists expected the government would have to revise down its 0.75% growth forecast for this year, even though the outlook in the second half of the year was likely to improve slightly.