KfW Bankengruppe has forecast that the healthy German recovery of the last two years is drawing to an end, and predicts that after a 0.5% growth figure in Q3 the economy will begin to grow at a more gradual pace.
The KfW Economic Compass has predicted a 0.2% decline in GDP during the final quarter of the year, and 1% growth during the entirety of 2012.
This would mean (if the forecast proves Delphic) that the growth of 2012 would be a third of the expected 3% of 2011.
KfW has highlighted the tremendous uncertainty regarding the eurozone sovereign debt crisis, but has also referred to the general global economic slowdown and the fact that many countries to which Germany exports are now embarking upon austerity measures.
KfW Chief Economist Dr Norbert Irsch said that German growth was facing a serious setback, adding that the long term prospects of the economy were largely dependent upon a resolution (or lack thereof) to the eurozone crisis.
The bank has expressed a slightly more pessimistic note regarding the future of the eurozone crisis and the implications for the German economy than earlier in 2011, reflecting the worsening situation in the eurozone.
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