The four leading institutes -- Ifo in Munich, IfW in Kiel, IW in Halle and RWI in Essen -- are scheduled to publish their twice-yearly economic forecasts on Thursday.

Quoting sources familiar with the latest updated projections, Handelsblatt said the think-tanks have also pared back their 2012 forecast to 0.8 percent from 0.9 percent previously.

And they expect Europe's top economy to expand by only 1.0 percent next year, instead of their earlier forecast of 2.0 percent.

Despite slowing growth, Germany's finances will show a more or less balanced budget both this year and next year, the institutes predict.

And the eurozone will overcome its long-running debt crisis in the course of 2013, the institutes forecast.

That means the fallout for the German labour market would remain rather limited and unemployment would fall slightly next year.

The German government is scheduled to publish its own updated forecasts next week.