Both the European Commission and the Organisation for Economic Co-operation and Development (OECD) will revise their growth forecasts for the Republic before the end of the month, according to draft figures.

The figures show that the Commission will reduce its Irish growth projections for this year from 3.5 per cent growth in gross domestic product (GDP) to 3.2 per cent. For 2003, the Commission's forecasts will be cut from a previous target of 6 per cent to 4.4 per cent.

Earlier this week, the Economic and Social Research Institute forecast annual growth of 4 per cent for this year and 4.2 per cent for next year. This compared with previous estimates of 3.7 per cent this year and 4.5 per cent in 2003.

The draft estimates, which were leaked to Reuters, reveal that the Commission is on the point of slashing overall growth forecasts for the euro zone next year to 2 per cent from 2.9 per cent. The revision is likely to reinforce fears about the euro zone's economy, which has been characterised by sluggish growth this year. The Commission foresees expansion in Germany, the EU's largest economy, dwindling to 0.3 per cent in 2002.

Concerns will also be compounded by news that the OECD is on the point of cutting 2002 growth forecasts for the 12-member currency zone from 1.3 per cent to 0.7 per cent.

The Paris-based think-tank expects that the Republic will continue to outpace its euro-zone colleagues this year, raising Irish growth forecasts to 4 per cent from 3.5 per cent. Projections for 2003 have been revised downward, however, to 4.7 per cent from 6.3 per cent.

This expected performance compares to OECD forecasts, which foresee the German and Italian economies barely avoiding recession this year, with growth of 0.2 per cent and 0.1 per cent respectively.

The OECD expects both economies to rebound slightly next year, with growth of about 1.5 per cent achievable in both.

The fresh forecasts are supported by a key OECD indicator for the Group of Seven rich industrialised nations, which slipped yesterday for a third consecutive month. Last month, the International Monetary Fund delivered its bleakest assessment of the world economy in years, reducing forecasts for both the US and Europe.

The OECD's revised growth estimates are due to be published on November 21st, while the European Commission will present its projections on November 13th. - (Additional reporting by Reuters)