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German, Austrian growth forecasts cut


German, Austrian growth forecasts cut


Germany’s central bank has cut its growth outlook for the country in the face of the eurozone debt crisis.

The Bundesbank also warned of risks of a recession.

The bank’s experts spoke of “widespread uncertainty” and German companies cutting back investment and hiring fewer new staff.

The expectation now is that the eurozone’s biggest economy will have grown by 0.7 percent this year, down from June’s 1.0 percent prediction.

For next year they are talking about just 0.4 percent growth – the previous forecast was 1.6percent.

The worst case scenario for the bank is a possible fall in economic activity late this year and early next, that would be a technical recession – two consecutive quarters of negative growth.

At the same time, Austria’s central bank cut its 2013 growth forecast for the country’s export-dependent economy to half a percent from the 1.7 percent it had expected in June.

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