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Germany cuts growth forecast for 2008 to below 2%

The German Government has revised down its growth outlook for Europe’s biggest economy with Economics Minister Michael Glos warning Wednesday of the threats to the nation unleashed by the crisis in the US housing market.

The risks to the German economy “have become larger” Glos told the daily Bild adding that the nation’s 2008 economic expansion rate is likely to come in at just under 2.0%. “The recovery (of Germany’s economy) will continue, but growth will be slower than in 2007,” said Glos. Germany emerged from a protracted period of stagnation in 2006 to report a growth rate of 2.9% with the economy expected to post an expansion rate last year of about 2.6%. Glos’ comments come in the wake of a series of downward revisions in the German growth outlook by leading economists and economic institutions. (m&