FRANKFURT, April 26 - Six influential German economic institutes have cut their growth forecast for this year in half, prompting a new rash of fears that the German economy is on the brink of recession.

After four years of lackluster growth, the downward revision - to 0.7 percent from 1.5 percent - illustrates that economic forecasting in Germany has become mostly an exercise in finding ever-more-precise ways to measure stagnation, economists say.

In their semiannual report on the German economy, submitted Tuesday, the six institutes said: "Almost no other country in the European Union has had a development in recent years that was so unfavorable. Obviously, the German economy is suffering from fundamental weakness."

Given such weak underpinnings, economists said it was quite possible that the German economy, Europe's largest and an engine for much of the Continent, could fall into a recession - classically defined as two consecutive quarters of contraction.

But this, they said, would scarcely be different from the current state of affairs.

"Trend growth in Germany is now so low that you can easily meet the technical definition of recession," said Thomas Mayer, the chief European economist at Deutsche Bank in London.

In fact, Mr. Mayer said, he viewed the forecast as optimistic because it assumes that Germany will keep growing, despite the spike in oil prices and the softening of the global economy.

"If oil prices keep going up, Germany won't even hold on to the 0.7 percent number," he said. "You would end up with stagnation, and more importantly, there would be no recovery next year."

Even without rising oil prices, there is no shortage of grim news in the report. The institutes, which generally anticipate the government's own forecast, predict that growth will be only 1.5 percent in 2006, less than in 2004, which was 1.6 percent.

With a growth rate this anemic, economists say, Germany cannot generate new jobs.

The current unemployment rate of 12 percent is a record in the post-World War II period, and poses a mounting political threat to Chancellor Gerhard Schröder. He faces a difficult state election next month in North Rhine-Westphalia, Germany's depleted industrial heartland.

"We had hoped that domestic growth would pick up, but there is no sign of that happening," said Bert Rürup, the head of Mr. Schröder's council of economic advisers.

Germany needs to grow from 1.5 percent to 2 percent a year, Mr. Rürup said, to generate significant new jobs.

While it has been able to increase exports, even with the handicap of a strong euro, it has not found a way to encourage consumer spending, a critical factor for reviving its moribund domestic economy.

"Germany has no short-term competitiveness problem," Mr. Rürup said. "It has a long-term growth problem."

Some private economists take a more positive view.

Consumer confidence, they note, rose slightly in a recent survey by the GfK Group, a market research firm in Nuremberg. And the damping effects of the euro may have passed.

Jörg Krämer , the chief economist at the HVB Group in Munich, said that if oil prices remained steady, growth in Germany should bounce back in the second half of 2005.

This, he admits, is a big if. The Ifo Institute in Munich, one of the six institutes that lowered the growth forecast, released a separate business survey on Monday showing the third consecutive monthly decline in corporate confidence in April.

Oil prices, economists say, are the main culprit for this, since Germany is one of the world's leading importers.

The effect of high oil prices is being felt throughout Europe, and is one reason the European Central Bank has been reluctant to start raising interest rates, despite its stated desire to do so.

On Tuesday, the bank's vice president, Lucas Papademos, said there was little evidence that growth was picking up in the 12-nation euro zone. His comments suggest no imminent change in the bank's monetary policy.

Indeed, some economists say rates could remain as they are until 2006. The German government, meanwhile, seems at a loss for a quick fix. It has begun to overhaul the labor market, through a package of measures known as the Hartz reforms.

Mr. Rürup said that if Germany had a more flexible labor market, it could create jobs with a lower growth rate.

Critics say these measures, while helpful, are only a half step. They make it easier for employers to hire temporary workers and create entry-level jobs for people who have been out of work. But they do not attack the job-protection rules that make it hard to lay off workers.

"They need to face down the unions," Mr. Mayer at Deutsche Bank said. "But they won't - neither the government nor the opposition."