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| German central bank cuts growth forecast for 2013 and 2014 | German central bank cuts growth forecast for 2013 and 2014 |
| (35 minutes later) | |
| Germany's central bank has cut its growth forecast for the country for 2013 and 2014. | Germany's central bank has cut its growth forecast for the country for 2013 and 2014. |
| The Bundesbank expects the economy to grow by 0.3% this year, down from an initial forecast of 0.4%. | The Bundesbank expects the economy to grow by 0.3% this year, down from an initial forecast of 0.4%. |
| In 2014, it expects 1.5% growth, down from a previous estimate of 1.9%. | In 2014, it expects 1.5% growth, down from a previous estimate of 1.9%. |
| The German economy has proved relatively resilient in spite of the eurozone crisis, but shrank late last year and only narrowly avoided a recession earlier this year. | The German economy has proved relatively resilient in spite of the eurozone crisis, but shrank late last year and only narrowly avoided a recession earlier this year. |
| "In the euro area the economy appears to be bottoming out. Nevertheless, the Bundesbank sees continuing structural problems as standing in the way of a rapid improvement," a statement said. | "In the euro area the economy appears to be bottoming out. Nevertheless, the Bundesbank sees continuing structural problems as standing in the way of a rapid improvement," a statement said. |
| "This is likely to place a major strain on the German economy," it added. | "This is likely to place a major strain on the German economy," it added. |
| The downgrading of the growth forecasts was "due mainly to downward revisions with regard to the external environment", the Bundesbank said. | The downgrading of the growth forecasts was "due mainly to downward revisions with regard to the external environment", the Bundesbank said. |
| But it said it expected a recovery later this year, supported by a relatively robust labour market, a sharp increase in wages and easing inflation. | But it said it expected a recovery later this year, supported by a relatively robust labour market, a sharp increase in wages and easing inflation. |
| The economy had escaped a recession in the first quarter of the year thanks to private consumption, which had offset a fall in exports. | The economy had escaped a recession in the first quarter of the year thanks to private consumption, which had offset a fall in exports. |