German growth forecast revised upwards

Germany’s leading economic institutes have revised their growth forecasts for the country in 2012 upwards slightly.

The eight institutes, whose forecasts form the basis for the German government’s own economic growth estimates, are now predicting expansion of 0.9 percent this year and 2.0 percent growth next year.

However they warned there are still risks to growth in Europe’s largest economy from the eurozone debt crisis.

In October, they had forecast 0.8 percent growth in 2012.

“After a lull that lasted several months, the German economy picked up again in spring 2012,” the institutes said in their twice-yearly report.

The institutes feel the global economic environment had brightened slightly since last winter, when the German economy contracted by 0.2 percent in the final quarter of 2011 due to sagging exports and weak private consumption.

Many economists now think this was a blip, and that Germany’s export driven economy, which bounced back quickly from the 2008/09 financial crisis, will avoid a recession.

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