GERMANY has sharply lowered its growth forecast for next year to 1 percent, from 1.8 percent previously in response to the uncertainty in financial markets, the country's economy minister said yesterday.

Economy Minister Philipp Roesler said despite the predicted slowdown, the country is not moving into recession. He cited the positive growth in the second half of this year and said the economy would grow a robust 2.9 percent in 2011 - above the 2.6 percent forecast in April.

He also noted unemployment is at a record low and order books are full.

Finance Minister Wolfgang Schaeuble said the tax yield from higher than anticipated growth this year would allow the government to push through tax cuts worth some 6 billion to 7 billion euros (US$8.3 billion to US$9.7 billion) from the start of 2013.

That would make good on a promise from Chancellor Angela Merkel's government when it took office to ease the tax burden.

Source:shanghaidaily