German growth hit by falling exports

Germany will rely on domestic demand for growth in 2012 after announcing that exports will rise only 2 per cent as imports rise 3 per cent.

As a result the Economy Ministry says it expects economic growth to slow to 0.7 per cent in 2012 before increasing to 1.6 per cent in 2013. It had previously forecast growth for this year of 1.0 per cent.

The European manufacturing powerhouse is traditionally reliant on exports but has been hit by decreased demand from neighbouring countries.

However German unemployment forecasts remain relatively positive, with the ministry predicting that joblessness would fall to 6.8 per cent this year and decrease to 6.7 per cent next year.