It is gloomiest forecast yet, the West German government released an annual economic report today predicting a year of overall stagnation at best and, at worst, a decline in gross national product of up to 1 percent.
The 78-page report blamed the slowdown in Europe's most powerful economy on increased energy costs, but also cited the weakening of some important markets for West German goods and the high domestic interest rates seem as necessary to prop up the sagging West German mark.
"For 1981, there is no longer any assurance of keeping the living standard of past years," said Count Otto Lambsdorff, Bonn's economics minister, in presenting the government's report. As if to underline the point for disbelieving citizens, he said at another point, "The times of easier living are over."
At the same time, Lambsdorff warned against being overly pessimistic about West Germany's economic prospects. He said the depressing near-term forecast reflected only a "growth pause," not an end to growth in the still vigorous economy.
The government's report assumes a new boom beginning in late summer of this year -- a popular expectation that a number of economic experts, however, are coming to doubt.
Release of the official forecast occurred on the second day of a stormy parliamentary budget debate in which the opposition accused the government of hiding the truth and laming the economy by inaction.
The glum forecast came against the additionally disheartening backdrop of a further slide this week in the value of the mark against the U.S. dollar and British pound. Today on the Frankfurt exchange, the mark closed at 2.0845 to the dollar, its lowest for more than three years, and reached a five-year low against sterling at 5.018.
The government said the prime cause for the weakness of the mark was West Germany's worrying balance of payments deficit, estimated at more than $14 billion in 1980 -- the result largely of expensive imported oil and free-spending German tourists traveling abroad. Today's report foresaw only a slight improvement in the deficit, figuring that this year it will shrink to between $11 billion and $12.5 billion.
Another main reason for the mark's decline has been the high interest rates in the United States and Britain. To counteract the pull of money to these other countries, West Germany's Federal Bank has kept its own interest rates up, aggravating recessionary forces here.
Pressures to ease monetary policy could grow following today's bleak forecast, which included a predicted rise in unemployment from an average 900,000 last year to 1.2 million in 1981.
One favorable bit of news in the Bonn outlook was a projected slowdown in inflation from about 6 percent at present to an average 4.5 percent this year. Of all the predictions, this could prove to be the most sensitive in view of the recent opening of annual wage negotiations between employers and the major German trade unions.
Stressing that economic recovery hinges largely on moderation in worker wage demands this season, the government has urged pay settlements within the projected inflation rate. But the metalworkers' union, I. G. Metall -- which agreements throughout industry -- has called for a 7 percent increase, against an employers' offer of 2.5 percent.