The German government says economic forecasts are worse than predicted. It says the economy will shrink by six percent this year, the steepest decline since the Second World War. Previous predictions had forecast just 2.25 percent contraction. They blame exports, once the great economic driver. They are down sharply, by almost 20 percent.
But the government predicts meagre growth of 0.5 percent for 2010. This contrasts with an IMF prediction of contraction of one percent . Critics are sceptical too, saying the government is relying on hope, while workers, pensioners and people on welfare bear the brunt. The biggest challenge will be unemployment. By next year there could be well over four and a half million people out of work in Germany.