A group of leading German economic think tanks lowered its forecast for the country's economy to contract 6% in 2009 from 2.25% fall estimated previously, reports said Wednesday citing sources related with the institutes.

The group will be presenting their forecast officially on Thursday, in which it reportedly said unemployment in Germany will rise to an average of 3.7 million this year and to 4.7 million in the next year.

The institutes also forecast an increase in the budget deficit to 3.7% of GDP this year and 5.5% of GDP next year, exceeding the European Commission's 3% deficit ceiling.

Also on Wednesday, the Internal Monetary Fund said the German economy is expected to contract 5.6% in 2009 and 1% in 2010.

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