The Bundesbank, Germany's central bank, reduced its forecast of GDP growth in the country for this year and 2013, according to a statement released today. The Bundesbank now expects that the largest economy in Europe will grow only 0.7% in 2012, down from the previously anticipated 1%. For 2013, that estimate was cut more drastically, to 0.4% from the former 1.6%.
In its statement, the central bank attributed much of this to "the difficult economic situation in some euro-area countries and widespread uncertainty."
An eventual recovery is expected; 2014 GDP growth is anticipated to be 1.9%, but only "if the euro-area banking and sovereign debt crisis does not escalate further and uncertainty among investors and consumers gradually subsides."