• Germany edition
 
Germany slashes 2013 growth prognosis
Photo: DPA

Germany slashes 2013 growth prognosis

Published: 17 Oct 2012 12:44 GMT+02:00
Updated: 17 Oct 2012 14:01 GMT+02:00

The government is pencilling in growth of 0.8 percent for 2012, marginally more than an earlier forecast for 0.7 percent.

But Europe's top economy will grow by only 1.0 percent next year, instead of the 1.6 percent Berlin had previously been hoping for, Rösler said.

"The good news is that the German economy is holding up and still on a growth path, despite all the global economic turbulence," Rösler told a news conference.

Germany's economic performance in the first six months of this year had turned out better than thought, the minister said.

"But with the European sovereign debt crisis and the economic weakening in developing countries in Asia and Latin America, Germany is in stormy economic waters," he cautioned.

Companies were holding back on planned investments and the majority of sentiment indicators pointed to a weakening of growth.

"We're therefore expecting a lessening of economic momentum in the winter half-year. But there can be no talk of a collapse in growth," Rösler insisted.

"The German economy remains robust and has stands on a structurally sound basis. There is every indication that the global economy can regain momentum and that means growth will pick up in Germany, too," Rösler said.

Last week, Germany's leading economic think tanks pared back their forecast for this year to 0.8 percent and slashed the prediction for next year in half to 1.0 percent, warning there was a "great danger" that Europe's top economy could fall into recession.

Chancellor Angela Merkel, too, acknowledged that after two "very good" years of growth, this year would be "weaker."

German gross domestic product (GDP) expanded by 4.2 percent in 2010 and by 3.0 percent in 2011.

Rösler said the outlook for the German market remains "very favourable, even if it is losing momentum."

Employment in Germany was already at record levels and was expected to rise further next year when some 41.6 million people were projected to have a job.

At the same time, the annual average jobless total was expected to fall to 2.9 million this year and remain at that level next year, Rösler said.

With purchasing power set to rise as inflation remains at around 2.0 percent this year and 1.9 percent next year, household spending "will remain the main driver of growth," the minister continued.

Export growth, traditionally the motor of the German economy, has slowed sharply since last year owing to the global economic weakening, but remains relatively robust, Rösler said.

AFP/The Local/hc

The Local (news@thelocal.de)

Your comments about this article

15:12 October 17, 2012 by Berlin fuer alles
Trying to figure out what the picture has to do with the story.
19:03 October 17, 2012 by smart2012
And here is the clear sign that Germany needs Euro more than others. And verkel has lost 1.5 years focusing on the wrong agenda, bringing Europe close to a disaster and creating nationalistic thoughts to come in again. If the disaster will not happen we need to thank Hollande, Monti and Draghi...

Go Europe

Chris Rea?
22:21 October 17, 2012 by ChrisRea
I am not sure we have much to comment here, without falling into the trap of groundless speculations. We have no clue what factors were significantly impacting the rate of growth and even less possibility to quantify Ms. Merkel's contribution (both positive and negative). Mr. Rösler presented only the current status and couple of forecasts, without providing data to support an analysis.

But on the very topic of nationalistic thoughts in Europe, I can say that at least this summer Ms. Merkel, together with other European and American officials, had a significant, if not decisive, impact in maintaining the state of law in Romania, even if the nationalist card was played by the ones seeking to monopolise the political power there. And I guess her presence in Bucharest today helps as well.
23:14 October 17, 2012 by smart2012
Thx Chris, I appreciate your low profile answer. But I have to keep criticizing verkel as she was destroying Europe with her buba driven political approach, which was driving populism in Germany, Greece, Spain etc.. We need to say thanks to the French that got rid of sarkozy and italians who got monti, who enabled more reasonable agenda and stopped a one sided (german) view approach.
Today's headlines
Germany plan air lifts to help fight Ebola
A Liberian man holds his daughter as they wait for treatment for suspected Ebola symptoms in Monrovia. Photo: DPA

Germany plan air lifts to help fight Ebola

Germany and France will send military transport planes to West Africa to help efforts to contain the Ebola epidemic, Chancellor Angela Merkel and military officials said on Friday. READ  

Germany beefs up asylum rules for Balkans

Germany beefs up asylum rules for Balkans

Germany made it harder Friday for people from Bosnia-Herzegovina, Macedonia and Serbia to apply for asylum after lawmakers classified the three Balkan countries as safe, with respect for basic rights. READ  

German Muslims rally against extremism
Muslims pray in Kreuzberg, Berlin, on Friday outside a mosque which was damaged in an arson attack. Photo: DPA

German Muslims rally against extremism

Muslims across Germany held a day of prayers and rallies on Friday to condemn both Islamic extremism and a backlash against their faith that has seen arson attacks on mosques. READ  

German military flight to Iraq starts with a hiccup
The trainers on the air strip in Hohn, Schleswig-Holstein. Photo: Bundeswehr.

German military flight to Iraq starts with a hiccup

Military trainers flew to northern Iraq from Germany on Friday, ahead of a huge delivery of weapons from the German military, but things didn’t initially go as planned. READ  

Munich gets four Euro 2020 matches
Photo: DPA

Munich gets four Euro 2020 matches

UPDATE: Munich will play host to four Euro 2020 games, European football’s governing body Uefa announced in Geneva on Friday, but London was the real winner. READ  

Driver, 18, ploughs into school pupils
The scene by the bus stop outside the school in Diepholz. Photo: DPA

Driver, 18, ploughs into school pupils

An 18-year-old drove into a group of students outside a school in western Germany on Friday morning, injuring several. READ  

View from Germany
'In a globalized world we don't need more loners'
'No' campaign supporters celebrate in Edinburgh after the results were announced. Photo: DPA

'In a globalized world we don't need more loners'

UPDATE: The German government welcomed the result of the Scottish independence referendum on Friday, with Foreign Minister Frank-Walter Steinmeier calling it the "right decision". READ  

Oktoberfest 2014
Your guide to Munich Oktoberfest's beer
Photo: DPA

Your guide to Munich Oktoberfest's beer

The Local's Oktoberfest guide chugs some of the Bavarian tipple fueling this whole shindig. READ  

Berlin squat ripped apart by fire
Kreuzberg's Cuvrybrache. Photo: DPA

Berlin squat ripped apart by fire

UPDATE: One of Berlin’s biggest squats was torn apart by a fire on Thursday night following an argument. READ  

Sterilized woman gets pregnant, sues doctors
Photo: DPA

Sterilized woman gets pregnant, sues doctors

A woman who gave birth after becoming sterilized has tried and failed to sue the hospital which carried out the operation. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Culture
Your guide to Munich Oktoberfest's tents
Photo: DPA
Hamburg
Drunk teachers ruin school trip to Hamburg
Marks & Spencer
Sponsored Article
Fashion Ladies of the Local: Win a New Autumn Look
Photo: DPA
Gallery
Oktoberfest 2014: The best and worst in dirndl fashion
Photo: Shutterstock
Gallery
Ten German words you'll never want to hear again
Photo: DPA
Education
German universities tumble in global rankings
Photo: Shutterstock
Business & Money
The three types of firms hiring foreigners
Photo: DPA
Berlin
Frisky couple shock Berlin commuters
Sponsored Article
Bilingual education from nursery to graduation at Phorms
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,348
jobs available
Toytown Germany
Germany's English-speaking crowd