The German government's council of economic advisers will forecast zero growth for 2009, Der Spiegel news magazine reported on Saturday. In an autumn forecast to be published on Wednesday, the five-member panel, also known as the "wise men", will also predict that unemployment will rise slightly in 2009 as the economic downturn is exacerbated by the global financial crisis.
The government recently lowered its 2009 forecast for the eurozone's largest economy to a 0.2 percent expansion from 1.2 percent previously. Independent economic research institutes have also cut their 2009 forecasts sharply. The government's council of economic advisers, led by economist Bert Ruerup, will blame declining industrial production and a shrinkage in orders for the slowdown, Der Spiegel said.
The advisers will also criticise a stimulus package unveiled by Chancellor Angela Merkel's government last week. The measures are not focussed enough, according to the council. They also attacked a move to exempt new cars from vehicle taxes, saying that it will not boost growth. The vehicle tax exemption is one of 15 measures the government agreed on Wednesday to counter the economic downturn.
On Friday, Germany reported a record 3.8 percent fall in manufacturing output in September. Preliminary third quarter gross domestic product (GDP) data due next week is expected to show a decline of around 0.25 percent, a government official familiar with the figures has told.
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