German Institute for Economic Research (DIW) President Marcel Fratzscher has announced that the think tank will be cutting its forecasts for Germany's growth rate this year due to the poor showing of the economy in the fourth quarter of 2012.

Fratzscher said that the weak output seen in the last quarter will result in a "slight" decrease to DIW's current 0.9% growth projection for 2013.

However, Fratzscher told Bild that he was "much more optimistic" about 2014 and is expecting growth of 2%.

Germany's economy shrank 0.6% in the fourth quarter of 2012 due to weakening demand for its exports as Eurozone countries struggled with the recovery.

Nevertheless, German officials still expect Berlin to skirt a recession and see a tepid pace of expansion resuming in the first quarter of this year.

JM

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