Bundesbank: German growth to ‘temporarily’ slow
German economic growth will probably weaken on waning export demand after a "further robust expansion" in the current quarter, the Bundesbank said.
“The pace of the German economy should temporarily slow after a very buoyant recovery over the first three quarters of 2010,” the Frankfurt-based central bank said in its quarterly report published today.
Growth may weaken to 2pc in 2011 and 1.5pc in 2012 from 3.6pc this year, it said.
The German economy, Europe’s largest, has powered the euro region’s expansion this year as companies stepped up output and hiring to meet global export demand.
The Bundesbank led by Axel Weber said it expects reviving global export demand to help translate into stronger consumer spending after a “more moderate” growth over the winter months.
The euro rose after the report and was trading at $1.3244 as of 12:24pm in Frankfurt. It was at $1.3226 yesterday.
German growth slowed to 0.7pc in the third quarter from 2.3pc in the previous three months, which was the fastest since records for a reunified Germany began in 1991.
In the first quarter of 2011, the German economy may show a “considerable slowdown,” the Bundesbank said.
Global projections could be considered “quite optimistic” given “continuous uncertainty” on financial markets and the “fragile situation” of government budgets in some countries, the central bank said in the report.