German growth at 0.4pc in 2012: OECD

BERLIN: The Organisation for Economic Co-operation and Development (OECD) has predicted that Germany, Europe's top economy, will grow by 0.4 percent this year, the economy ministry in Berlin said on Tuesday.

"Due to weak foreign trade and the debt crisis in the eurozone, the OECD sees price-adjusted growth in gross domestic product in Germany of 0.4 percent," the ministry said, ahead of the report's official publication.

The German government itself expects growth of 0.7 percent this year and has insisted there is no danger of the world's second-largest exporter after China falling into recession.

The German economy suffered badly during the 2008 global financial crisis, registering its worst recession in six decades.

But due to multi-billion-euro stimulus packages and a scheme allowing workers to reduce their hours while keeping their jobs, Chancellor Angela Merkel managed to keep a lid on unemployment and growth rebounded strongly.

After shrinking by around 5.0 percent in 2009, Germany marked record growth of 3.7 percent in 2010 and continued to expand at a decent clip of 3.0 percent last year.

German unemployment currently stands at a record low seasonally-adjusted rate of 6.7 percent. Consumer and business confidence figures have also remained surprisingly strong despite the euro debt crisis, suggesting that Germany will continue to act as a strong anchor in the euro-zone storm.

However even Germany's resilience will not be able to withstand completely a euro-zone crisis that has threatened to tip the 17-nation zone as a whole into recession, economists say. The OECD report was due to be published officially at 12:30 pm (1130 GMT).

Copyright AFP (Agence France-Presse), 2012