Top German institutes halve 2013 growth forecast

Germany’s leading economic institutes halved their 2013 growth forecast for Europe’s largest economy to 0.4 per cent today, citing a significant downturn in industrial production during the winter.

The institutes, whose analysis flows into the German government’s own economic forecasts, also trimmed their estimate for growth next year to 1.8 per cent, down from the 1.9 per cent they had predicted in April.

“The German economy is on the cusp of an upturn which will be driven by domestic demand,” they said in a statement.

Exports will increase modestly thanks to stronger global growth while imports will get a big boost from domestic demand, meaning that foreign trade will probably drag on growth, they added. (Reuters)