Growth in Germany, Europe's largest economy, is likely to weaken in the fourth quarter of this year and the first of 2013 as firms postpone investments due to the eurozone crisis. The Economy Ministry said on Friday it expected "a noticeably weaker economic dynamic" over winter. "Nonetheless at the moment we only expect a temporary period of weakness," it said.
Data this week has shown the private sector contracting, industrial orders tumbling, output dropping and exports sliding at their fastest pace since late last year as demand among its crisis-struck eurozone trading partners weakens. The ministry suggested shipments abroad, which had managed to hold up fairly well this year as demand from Asia compensated for a weaker appetite in European countries, were unlikely to boost the economy in the months ahead.
"Domestic and foreign demand for German industrial products is declining. There will be a lack of momentum from abroad in the coming months," the ministry said. The ministry said it expected third-quarter gross domestic product to have increased slightly after rising by 0.3 percent in the second quarter and 0.5 percent in the first. Germany will publish preliminary GDP data for the third quarter next week. Economists polled by Reuters expect an increase of 0.2 percent on the quarter.
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