Germany cuts growth forecasts in face of geopolitical crises
The German government slashed Tuesday its growth forecasts for this year and 2015 due to geopolitical crises and slower-than-expected global expansion.
Economy Minister Sigmar Gabriel said in a statement that Berlin was now pencilling in growth of 1.2 percent in 2014 and 1.3 percent in 2015, instead of the previous forecasts of 1.8 percent and 2.0 percent respectively.
"The German economy is currently in difficult waters in terms of foreign trade," Gabriel said.
"Geopolitical crises have increased uncertainty in Germany and sluggish global growth is weighing on the economy," the minister said.
Nevertheless, "domestic economic forces remain intact, with the robust labour market forming the foundation to that," Gabriel continued.
Wages and employment were continuing to rise, boosting consumer spending and spending on home construction, he said.
"As soon as the international environment improves, the competitiveness of German companies will bear fruit and the German economy will return to a path of solid growth next year," Gabriel insisted.
© 2014 AFP