• Germany's news in English

Germany slashes 2013 growth prognosis

The Local · 17 Oct 2012, 14:01

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

Facebook Twitter Google+ reddit

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.

Story continues below…

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)

Facebook Twitter Google+ reddit

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
The Local List
Germany's top 10 most surreal sites to visit
The Upside-Down House, in Mecklenburg–Western Pomerania. Photo: Olaf Meister / Wikimedia Commons

From upside-down houses on Baltic islands to a fairy-tale castle near the Austrian border, Germany is a treasure trove of the extraordinary.

Bavarian critics back Merkel for Chancellor again
Photo: DPA

The Christian Social Union (CSU) have long delayed backing Angela Merkel as their candidate for Chancellor in next year's general election. But now key leaders are supporting her publicly.

Four taken to hospital after hotel toilet bursts into flames
File photo: DPA.

Four guests at a Nuremberg hotel were taken to hospital due to smoke inhalation early Monday morning after a toilet there burst into flames.

Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German towns, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd