German government cuts 2013 growth outlook

Germany's government has revised its 2013 economic outlook, expecting slower growth than predicted earlier, ahead of a strong rebound towards the end of 2013. It hopes faltering exports will be offset by domestic demand. Germany's economy would likely grow by 0.4 percent this year, the government in Berlin said Wednesday, as it cut its original 2013 growth prediction of 1 percent by more than half. A temporary weakness in the first few months would be overcome by a significant revival in the course of the remaining year, Economics Minister Philipp Rösler told journalists in Berlin. Rösler also said he expected a return to stronger growth in 2014, when economic activity in Germany would accelerate to an annual rate of 1.6 percent. On Tuesday, Germany's Federal Statistics Office released preliminary growth data for last year, showing that German gross domestic product (GDP) expanded by a feeble 0.7 percent in 2012, after notching up growth of 4.2 percent and 3.0 percent respectively in 2010 and 2011. Berlin hopes robust domestic demand will help Europe's biggest economy prevent a stronger decline, or even a recession, in 2013. "The labor market will remain stable at record employment levels, while wages will rise and inflation remains modest," Rösler said. However, 2013 foreign trade figures, he added, might turn out to be weaker next year as the recession in the eurozone would likely continue.