Bundesbank optimistic despite periphery problems

Date: Friday 08 Jun 2012

Bundesbank, Germany's central bank, remains upbeat about the German economic outlook in spite of the 'temporary weakness' tied to external problems stemming from the Greek sovereign debt crisis and serious challenges for the Spanish financial sector.

In a report released on Friday, Germany's monetary authority expects the nation's economy to grow by 1.0% in 2012 and 1.6% in 2013 under the premise that the global economy will continue to recover and that the sovereign debt crisis in the Eurozone's periphery will not worsen.

In prior estimates last December, Bundesbank estimated that the German economy would only grow by 0.6% in 2012, four decimal points lower than its updated forecast.

On the other hand, it reduced the 2013 growth forecast by 20 basis points from the initial 1.8% estimate.

FM

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