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Paper and glass would face a bigger contraction, of 5%.
The panel expects a bigger contraction of Japanese GDP in 2002 and slower growth in 2003 than it did a month ago.
A survey of economists had predicted a 0.1% drop in GDP between September and December, though several prominent analysts had forecast a bigger contraction in the wake of poor manufacturing data.
A survey of economists had predicted a 0.1% drop in GDP in the fourth quarter, though several prominent analysts had forecast a bigger contraction after a series of surveys last year showed the manufacturing industry suffering from a downturn in exports.
Above all, it outlined the case Labour will put to voters at the election due by June.Mr Darling had to own up to a much bigger contraction in the economy this year than he expected at the time of the budget.
But even that bigger contraction was surpassed by new figures for three other countries, with Japan and Germany suffering the most from projected falls in GDP this year of 6.2% and 5.6% respectively (see chart 2).In recent weeks there have been some signs that the worst of the recession may soon be over in Britain.
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Commenting on the latest Office for National Statistics ONSS) manufacturing figures, Lee Hopley. of the EEF manufacturers' organisation, said: "Output gains in electrical equipment and transport sectors weren't enough to offset bigger contractions in pharmaceuticals and metals.
The biggest contraction came in the government sector.
Housing construction is in the midst of its biggest contraction since World War II.
"The doomsday scenario, the big contraction, might be happening right now.
China's factory activity suffered its biggest contraction in two years in July as the number of new orders fell.
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