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Germany’s Bundesbank said there is greater uncertainty over the country’s economic outlook as a consequence of the euro region’s debt crisis.
“It remains to be seen to what extent the recent intensification of the sovereign debt crisis in the euro area and signs of a global slowdown further damp prospects for the German economy,” the Frankfurt-based central bank said in its monthly report published today. “Overall, recent indicators suggest that economic momentum could pick up gradually in the second half of the year after a weaker spring quarter.”
Since posting growth of 0.5 percent in the first quarter, Germany’s economy has cooled. Factory orders dropped the most in five months in April, industrial production declined and business confidence fell to the lowest level in six months in May. Still, the Bundesbank on June 8 lifted its 2012 growth forecast to 1 percent and said Europe’s largest economy may expand 1.6 percent next year.
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