Germany lowers 2012 growth forecast

Germany almost halve its economic growth forecast for 2012 in its latest projection on Thursday, as the country is bogged down in the deepening eurozone debt crisis. A growth of 1.0 percent is expected next year in the European economic powerhouse, almost half the 1.8 percent forecast in April, as the sovereign debts crisis severely impacted on its major trading partners in Europe. "The growth rate has slowed somewhat as it is expected," said Economy Minister Philipp Roesler. The reason for the slightly slower growth is the increasing risk from the international environment, he noted. Meanwhile, the expectation on Germany's output growth for this year remain at an optimal 2.9 percent, due to a strong start at the beginning of the year, although the economy become increasingly stagnant at the second half of the year. The minister insisted that the country's economy shows no sign of recession, since the 1.0 percent growth also indicates trend upwards, while the average unemployment rate is expected to drop to 6.7 percent from 7.0 percent this year. "The German economy is doing well, it remains on a growth path. For Europe, we are still an anchor of stability and a growth motor," Roesler said, adding that Germany will come out of the crisis much faster than people thought or hoped. An average growth rate of 1.7 percent is forecasted until 2016, above Germany's estimated potential growth of 1.4 percent.