Low growth, but growth
October 17, 2012
Germany's coalition government of Christian Democrat Chancellor Angela Merkel revised its forecast of domestic economic growth on Wednesday, readjusting its expectations to recent developments on global markets.
Berlin only slightly altered its forecast for this year, penciling in 0.8-percent growth instead of 0.7 percent in its previous survey. But for the next year the government estimates there will be just 1.0-percent growth, down from 1.6 percent forecast in spring of this year.
Economics Minister Philipp Rösler stated it would be an achievement in itself to keep the economy on an expansion course, given the huge macroeconomic uncertainties on global markets and the protracted eurozone debt crisis. "Germany is currently sailing in rough waters in the face of the debt crisis and slowing growth in important emerging countries," Rösler told reporters in Berlin.
Jobs remain safe
The government's forecast once again highlighted the performance gap between Europe's biggest economy and many of its partners in the 17-member euro currency bloc, with large parts of the area mired in recession and struggling to wriggle out of it, despite harsh austerity measures.
Berlin said it expected the domestic labor market to remain robust, saying that unemployment would even dip slightly throughout the current year and would continue to hover around 2.9 million people in 2013.
The German government issues its growth forecast twice a year. The predictions play a pivotal role in drawing up federal tax estimates at the end of October and ultimately in working out draft budgets at federal and regional levels. Growth calculations are provided by the Economics Ministry itself as well as by the National Statistics Office (Destatis) and the Bundesbank, the German central bank.
hg/jr (dpa, dapd, AFP)