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German growth forecast chopped on eurozone woes

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German growth forecast chopped on eurozone woes
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Germany has cut its economic growth forecast in as the country finally starts to feel the effects of the eurozone credit crisis.

The slowdown prediction comes as companies postpone investment, and the economy minister warned that turmoil in Germany’s main trading partners could hit exports in the second half of the year.

Philipp Rösler said despite the stormy economic waters Germany is standing its ground and remains on track for growth.

But he added: “The environment for the German economy has become more difficult overall, due to the eurozone debt crisis. The growth forecast for next year is therefore one percent. That is less than the 1.6 percent forecast in the spring.”

For this year, the economy ministry expects growth of just 0.8 percent a slight improvement on its 0.7 percent forecast back in April.

But it is a big slowdown from the previous two years when the German economy powered through the eurozone’s sovereign debt crisis – posting 4.2 percent growth in 2010 and 3.0 percent last year –
while others were in recession and seeking bailouts.