German economic growth seen halved due to crisis

Germany's leading economic research institutes have halved their prediction for the country's growth next year, saying the financial woes of other European nations continue to weigh heavily on the bloc's largest economy.

In a report for the Economy Ministry released today, the institutes said they now expect gross domestic to increase by only 1 per cent in 2013.

They also warned that their analysis is based on the prediction that the situation in the eurozone will gradually stabilize. But they say there are risks of it deteriorating, which could drag German growth even more significantly.

The institutes also reduced their forecast for 2012 economic growth from 0.9 percent to 0.8 percent, saying there are "a large number of signs that overall economic expansion will weaken toward the end of the year."

AP