The International Monetary Fund is to cut its 2005 growth forecast for the German economy from 1.8% to 0.8%, the Financial Times Deutschland reported.
Germans are angry about the rising unemployment figures
The IMF will also reduce its growth estimate for the 12-member eurozone economy from 2.2% to 1.6%, the newspaper reported.
The German economy has been faltering, with unemployment levels rising to a seventy-year high of 5.2 million.
Its sluggish performance continues to hamper the entire eurozone.
The IMF's draft World Economic Outlook - due to be published in April - would point to a marked deterioration in Germany's economy, the FT report said.
In September, the IMF had said that German growth for the current year would be 1.8%.
The IMF has also revised eurozone forecasts, the paper said, taking into account high oil prices, the strength of the euro and weak demand in many of the world's leading economies.
Europe's economic difficulties were highlighted on Tuesday by the Organisation for Economic Co-operation and Development, which argued in a report that the continent could only achieve US living standards by freeing up its labour markets.
"The eurozone does not look like it has a self-sustaining recovery," James Carrick, an economist with ABN Amro, told the newspaper.
"It is too dependent on the rest of the world."