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German government slashes growth forecasts

FXStreet (Łódź) - The German Economy Minister Sigmar Gabriel announced on Tuesday that the German government cut growth forecasts for this and next year, due to the recent slowdown in global growth and rising geopolitical tensions.

“The German economy is steering through rough foreign waters," Gabriel stressed. "Geopolitical crises have also increased uncertainty in Germany and moderate growth is weighing on the German economy.”

According to the new outlook, the German GDP should expand by 1.2% in 2014, compared to the previous forecast of a 1.8% rise. In 2015 the economy is expected to grow by 1.3%, down from 2%.

Moreover, the Economy Minister signaled that the export environment will most probably remain difficult. He pointed however to the solid domestic demand and rising employment and expressed confidence that Germany is capable of overcoming the difficulties in now faces.

He also added that a lot depends on the situation in the Eurozone, which should make more efforts to boost growth.

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