FRANKFURT Dec 7 Germany's Bundesbank cut its
growth outlook for next year on Friday as the euro zone debt
crisis takes its toll on the bloc's largest economy, but added
that the country would return to its growth path soon.
The move comes a day after the European Central Bank cut its
growth forecasts for next year pointing to weaker growth
prospects for the bloc's core countries, such as Germany, France
and the Netherlands.
Germany has been a key growth driver of the euro zone, now
in its second recession since 2009, but the country's resilience
to the crisis is wearing thin, and the central bank's new
projections reflect this.
"Given the difficult economic situation in some euro-area
countries and widespread uncertainty, economic growth will be
lower than previously assumed," the Bundesbank said.
"The Bundesbank does not see a protracted slowdown but
instead anticipates a return to growth path soon."
Industrial orders and output in Germany have dropped in
recent months, with exports falling at their fastest pace since
late last year. Economists expect the German economy to contract
in the fourth quarter but to improve as soon as in the first
The Bundesbank said there was a chance of Germany entering a
recession - defined as two consecutive quarters of negative
"There are even indications that economic activity may fall
in the final quarter of 2012 and the first quarter of 2013," it
The Bundesbank now expects Germany's economy to grow 0.7
percent this year, down from an earlier forecast of 1.0 percent,
and 0.4 percent next year, down from a June forecast of 1.6
However, it put the 2014 growth forecast at a healthy 1.9
The Bundesbank sees inflation above 2 percent this year and
falling to 1.5 percent next year, having earlier expected
inflation of 2.1 percent this year and 1.6 percent in 2013. In
its first take on 2014 inflation, it estimated prices to rise
1.6 percent that year.
(Reporting By Eva Kuehnen and Sakari Suoninen)
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