Germany slows but avoids recession

The German government has scaled back its forecast for economic growth to just 0.7 per cent this year but still believes Europe’s biggest economy will avoid a recession.

Official predictions suggest Germany will grow 0.1 per cent in the first quarter of 2012 on the back of a strong labour market, but the government cut the full-year figure from the 1 per cent expansion previously forecast.

It is thought the economy shrank by 0.25 per cent in the final quarter of 2011, although it still recorded an impressive expansion of about 3 per cent over the whole of last year.