Institute cuts Germany 2012 GDP growth forecast to 0.8%

12 September 2012 14:03  [Source: ICIS news]

LONDON (ICIS)--Germany’s RWI economics institute has cut its forecast for the country’s 2012 GDP growth to 0.8%, from 1.1%, because of a cooling in international economic conditions and ongoing effects of the eurozone debt crisis, it said in an update on Wednesday.

RWI said that after a revival in the early part of the year, Germany’s economy slowed down over the summer. Trends in industrial orders weakened and prospects on external markets dampened, it said.

“The risks to the overall economic development are significant, in particular because the crisis in the eurozone still remains unresolved,” the institute added.

For 2013, RWI reduced its GDP growth forecast for Europe’s largest economy to 1.0%, compared with its previous forecast of 2.0%.

Earlier this week, Germany’s economics ministry said that the country’s economic performance is still “robust and resistant” – despite recessionary trends in the eurozone and difficult global economic conditions.

In related news on Wednesday, Germany’s constitutional court rejected bids to block the eurozone rescue fund. However, the court ruled that Germany’s government cannot raise the country’s contribution of €190bn ($244bn) to the fund without additional approvals by parliament.

Additional reporting by Franco Capaldo

($1 = €0.78)

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

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