German government raises 2013 growth forecast slightly to 0.5 per cent, 2014 outlook unchanged

BERLIN – The German government is raising slightly its forecast for growth this year, though it still expects Europe’s biggest economy to expand by only 0.5 per cent.

The new forecast issued Thursday compares with the previous prediction in January of 0.4 per cent growth. The economy grew by 0.7 per cent in 2012 — much slower than the two previous years but still a contrast with recessions elsewhere in Europe.

Economy Minister Philipp Roesler wrote on Twitter that the government is leaving its prediction of 1.6 per cent growth next year unchanged. Its traditionally cautious forecast falls short of a recent prediction by leading economists that the economy will expand 0.8 per cent this year and 1.9 per cent next.

Germany’s economy shrank in last year’s final quarter but is believed to have return to growth since.