RWI, the German economic research institute, forecasts that Germany's economy will shrink by 0.2 per cent this year, but predicts 1.8 per cent growth for 2004. The Essen-based organisation had previously forecast that the German economy would grow by 0.6 per cent in 2003.
RWI's researchers justify their gloomy outlook for 2003 with the strong euro and falling investments in construction projects. They claim that there is no indication that the German economy will grow by 0.75 per cent this year, as the government predicts.
The institute believes that Germany's tax reform will contribute 0.3 per cent to next year's economic growth.
Source: Die Welt
