BERLIN (Reuters) - The German economy will hardly grow until next year and the euro zone will be slow to recover from its sovereign debt crisis, a German private banking body said on Wednesday.
Germany had until recently avoided much of the economic slowdown which has dogged the euro zone, helping the bloc dodge a recession.
But the fall in demand from its European neighbors has finally taken a toll on German growth.
“The economists of the private banks expect that in the second half (of 2012) the German economy will barely move anywhere,” the Association of German Banks (BdB) said.
The BdB said the economy will expand by 1.1 percent in 2013, up from 0.9 percent in 2012, citing chief economists from leading financial institutions.
The latest figures almost mirror those of Germany’s IfW think tank which last week trimmed its 2012 growth forecast for the German economy by 0.1 percentage point to 0.8 percent. The IfW expects 2013 growth of 1.1 percent.
“Many companies are postponing investments at the moment,” said Hans-Joachim Massenberg from BdB’s senior management board. “As soon as the negative consequences of the sovereign debt crisis begin to fade, the current impasse will be overcome.”
The private bank association said that although a green light from Germany’s top court on a new euro zone bailout fund had assuaged fears that the monetary union could fall apart, the European economy was not yet out of the woods.
The BdB predicted that overall gross domestic product in the euro zone would fall by 0.5 percent in 2012. In 2013, however, it could see an increase of 0.3 percent.
“Due to constant consolidation measures as well as unresolved structural issues, a recovery process will be slow to take effect,” the association said.
Reporting by Chris Cottrell; Editing by Toby Chopra