German growth will slow to a crawl this year, the government said Wednesday, downgrading its 2012 forecasts as Europe's top economy feels the pain from the eurozone crisis and weaker emerging markets.
Germany will grow by a meagre 0.7 percent this year, Economy Minister Philipp Roesler said, cutting the official forecast from the 1.0 percent predicted in October.
However, Roesler forecast a rebound in 2013, with growth of around 1.6 percent. This was Berlin's first estimate for output next year.
"Germany is and remains an anchor for stability and growth in Europe," the minister said as he presented the twice-yearly government forecasts.
"After two extraordinarily strong growth years, the German economy is still in robust form. However, due to a difficult external environment, we are expecting a temporary dip in growth in the first half of the year," he said.
"Nevertheless, we are firmly convinced that the German economy will find its way back to a strong growth path in the course of the year."
The "main risk" for growth in 2012 is "without doubt a worsening of the crisis in Europe," the minister said.
He said the projections were based on the assumption of a relaxation in market tensions and a rapid solution to the eurozone debt crisis.