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German government cuts 2013 growth forecast to a modest 0.4 per cent

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German Chancellor Angela Merkel, right, and German Economy Minister and Vice-Chancellor and minister of economic affaires, Philipp Roesler, left, attend a meeting of the German federal parliament, Bundestag, in Berlin, Germany, Wednesday, Jan. 16, 2013. (AP Photo/Michael Sohn)

BERLIN – The German government has lowered its growth forecast for the country’s economy, Europe’s biggest, and now says it will expand by only 0.4 per cent in 2013.

In October, the government had predicted growth of 1 per cent for this year. But the economy hit a weak patch in the fourth quarter amid trouble elsewhere in the euro area.

Economy Minister Philipp Roesler said Wednesday that the economy will pick up after a slow winter and forecast growth of 1.6 per cent for 2014.

The government’s revised forecast comes a day after official data showed that the economy grew by 0.7 per cent in 2012 — below the previous year’s figure of 3 per cent.

The new 2013 forecast puts the government in line with last month’s projection by Germany’s central bank, the Bundesbank.

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