"Amid still elevated euro area uncertainty, we now project GDP (gross domestic product) in Germany to expand at around 0.3 percent in 2013," compared with a previous forecast of 0.6 percent, the IMF said in a statement.
Growth this year "is expected to be weak," the IMF said.
Nevertheless, "amid strong domestic fundamentals, a recovery in activity in Germany is expected in the second half of 2013." But it added that "a more robust rebound is being held back by continued weakness in business investment."
While "consumption has been robust" and "domestic fundamentals continue to remain strong and past reforms have paid off as seen in low unemployment ...
business investment has been declining since late 2011," the organisation complained.
Uncertainty about the prospects for the euro area in face of the ongoing recession had hit both exports and business investment, the IMF said.
A gradual pick-up in activity projected towards the end of the year was "conditional on a further and tangible reduction in this uncertainty and a materialisation of the expected gradual recovery in the rest of the euro area," it said.