The German government Wednesday cut its forecast for the country's economic growth to 0.7% in 2012 from a previous forecast of 1%, according to the government's annual economic report.
Economics Minister Philipp Roesler said in a statement that the German economy would "suffer a growth dent" in the first half of 2012, but that the economy, driven by continued strong domestic demand, would pick up again in the second half of the year.
"Our economy is robust. There can be no talk of recession," Mr. Roesler told reporters.
The Federal Statistics Office has reported that the German economy grew 3% in 2011.
According to the government's annual report, the unemployment rate will fall to 6.8% this year from 7.1% last year. Domestic consumption is forecast to grow 1.1% in 2012, down from 2.2% in 2011. The government forecasts slower growth in capital expenditure by businesses, predicting growth of 2% this year after a robust 8% in 2011.
The government report forecasts growth of 2% in exports, compared with 8.2% last year, and growth of 3% in imports, compared with 7.2% in 2011.
It forecast inflation of 1.8% in 2012.
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