An economic survey has found that German business confidence has fallen for the fourth month in a row. The drop came after Germany lowered its growth forecast for 2012 amid the escalating eurozone debt crisis.
Germany is struggling to weather the economic storm
German business confidence fell again in October, the Munich based Ifo Institute for Economic Research revealed Friday.
According to a key survey released by Ifo, the monthly confidence index fell from 107.4 points in September to 106.4 in October, marking the fourth month in a row that the index has deteriorated. It's currently at its lowest level since June 2010.
Nevertheless, the decline narrowly avoided predictions that it would reach 106.3 points, and it remains above its long-run average.
Business expectations for the next six months "are noticeably more pessimistic than previously," Ifo chief Hans-Werner Sinn said Friday.
But "given the international turmoil, the German economy is still performing well," he insisted.
Rösler blamed uncertainty in financial markets for Germany's slowdown
The drop came a day after the German government lowered its growth forecast for next year in a clear sign that Europe's financial crisis is taking its toll on Germany's export-driven economy.
Economy Minister Philipp Rösler lowered Germany's 2012 growth forecast on Thursday to 1 percent, down from 1.8 percent.
"The rate of growth has, as expected, slowed somewhat," said Rösler.
"The reason for this slightly slower growth path is the risk from the international environment, which has increased significantly. With the higher uncertainty due to the debt crisis in several countries, global growth rates have cooled markedly," he added.
Rösler insisted, however, that the country was not headed for recession.
"There is no discussion of recession ... 1 percent growth is still growth. The trend is still upwards," he stressed.
Author: Charlotte Chelsom-Pill (AFP, AP)
Editor: Martin Kuebler