BERLIN, June 28 Germany's economy will grow
sluggishly over the summer due to uncertainty over the euro zone
debt crisis but it will pick up in the fourth quarter, the Ifo
institute said on Thursday, forecasting just 0.7 percent
Domestic demand will drive growth of 1.3 percent next year,
Ifo said, with private consumption likely to rise 1.5 percent
due to higher incomes and the solid labour market.
"The German economy will likely go through a period of
weakness in the summer half-year," Ifo said in its statement.
"The reason for this is continuing uncertainty over the
continuation of the European debt crisis."
"The economy should pick up next year, driven by domestic
demand, as long as the European debt crisis does not escalate
much. Employment should rise during the whole time-frame."
Data earlier on Thursday showed the number of Germans in
work rose by 37,000 in May to 41.54 million.
Ifo belongs to a consortium of top institutes that in April
forecast 0.9 percent growth for Germany this year and 2.0
percent growth next year.
The institute's closely-watched business sentiment survey
showed last week morale fell for a second straight month in June
to its lowest level in over two years.
(Reporting By Sarah Marsh)