According to the new estimates, German economy will expand by 0.7% in 2012 (vs the previous forecast of 1%) and by 0.4% in 2013 (sharply down from 1.6%). The Buba points to the impact which the continuing debt crisis in the peripheral Eurozone countries has on the core ones as the reason for a gloomier outlook.
However, the central bank implies that German growth should pick up again in 2014 and grow by 1.9%. The reports states that: “The sound underlying health of the German economy suggests that it will overcome the temporary lull without major damage to the labour market, in particular."
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