Germany ups 2012, cuts 2013 growth forecasts

The German government fractionally upgraded its growth forecast for the current year, but slashed its prognosis for next year, Economy Minister Philipp Roesler announced on Wednesday. The government is pencilling in growth of 0.8 percent for 2012, marginally more than an earlier forecast for 0.7 percent. But Europe's top economy will grow by only 1.0 percent next year, instead of the 1.6 percent Berlin had previously been hoping for, Roesler said. "The good news is that the German economy is holding up and still on a growth path, despite all the global economic turbulence," Roesler told a news conference here. Germany's economic performance in the first six months of this year had turned out better than thought, the minister said. "But with the European sovereign debt crisis and the economic weakening in developing countries in Asia and Latin America, Germany is in stormy economic waters," he cautioned. Companies were holding back on planned investments and the majority of sentiment indicators pointed to a weakening of growth. "We're therefore expecting a lessening of economic momentum in the winter half-year. But there can be no talk of a collapse in growth," Roesler insisted. "The German economy remains robust and has stands on a structurally sound basis. There is every indication that the global economy can regain momentum and that means growth will pick up in Germany, too," Roesler said.