Berlin - The German government's panel of economic advisers roundly criticized as inadequate Berlin's plans for spurring growth in Europe's biggest economy, in a report released Wednesday.

In their report presented to Chancellor Angela Merkel, the so-called "five wise men" said that after emerging from a protracted economic downturn three years ago, the German economy will slump into recession in 2009.

This is likely to come amid rising unemployment and a contraction in exports with the advisers calling on the government to press on with much-needed reforms.

Merkel's government has launched a 12-billion-euro stimulus package, which includes a range of measures including steps to boost car sales as a way of helping the nation's economy to limp through the current global financial turmoil.

But the measures included in the package were simply a "loose conglomeration of unrelated actions," the five experts told the government,

Instead, the panel proposed that the government implement a bigger stimulus package which could represent about 1 per cent of gross domestic product.

"We need more than short-term measures," said the panel in their 550-page report as the "shock waves spreading out from the financial crisis" hit Germany's economy.

Faced with dwindling inflation and shrinking economic growth, the European Central Bank has moved to cut rates to underpin economic confidence in the 15-member eurozone.

But the panel of advisers believe that the ECB has room to push on with its rate-cutting cycle next year.

"The European Central Bank should, in the coming year, make use of the available room for interest rate cuts," the advisers said in their report.

Chaired by Bert Ruerup and including Wolfgang Franz, Beatrice Weder di Mauro, Peter Bofinger and Wolfgang Wiegard, the panel of advisers expect the German economy to report zero growth in 2009 after expanding by 1.7 per cent this year.

However, data to be released on Thursday is predicted to show Germany slumping into a recession during the third quarter.

The German economy shrank by 0.5 per cent in the second quarter, with analysts expecting Thursday's figures from Germany's statistics office to show a further 0.1 per cent contraction in the quarter which ended September 30.

The panel expects German exports to edge up by 0.4 per cent next year with imports to rise by 0.5 percent. This follows a 4.2 per cent rise in exports last year and a 3.4 per cent increase in imports, the panel forecasts.

The release of the report came against the backdrop of renewed calls for Berlin to take additional measures to underpin the German economy in the wake of world financial crisis.

Overall, the five experts take a more gloomy view of the outlook for the German economy than the government.

Merkel's Christian Democrat-Social Democrat coalition government expects the nation's economy to post a feeble 0.2-per-cent growth rate in 2009.

They expect after months of steady decline, unemployment to climb on average by 35,000 next year to 3.3 million.

The government has also unveiled a 500-billion-euro bank rescue package for the financial houses which have been hit by the meltdown in world markets triggered by the subprime mortage industry crisis and the global credit crunch.

But the five advisors warned: "It leads to distortions in the economy if such a large industry is provided with one-sided support."

Germany's transport, building, retailing, airline construction and chip business sectors have all called for aide to help them face up to the current economic downturn. (dpa)