Germany -- the largest economy in the euro zone and the fifth-largest economy in the world -- will battle strong economic headwinds the rest of this year, the country’s Federal Ministry of Finance warned in its October monthly report.
"Germany will see a significant economic slowdown in the last quarter of 2012," the ministry said in the report released on Monday, according to the Wall Street Journal.
However, the ministry anticipates the German economy will regain momentum next year, when it expects the country’s gross domestic product to rise 1 percent, the Journal reported.
Germany's GDP at purchasing power parity, or PPP, exchange rates was estimated to be $3.14 trillion last year, according to the U.S. CIA's World Factbook. The only larger single-country GDPs at PPP exchange rates were those of the U.S., China, India, and Japan.
The ministry attributed Germany's expected slow growth in 4Q to the weak economies of its fellow euro-zone members, the Journal said.
Continue Reading Below
Nonetheless, Europe is making progress in dealing with the sovereign-debt crisis that has bedeviled it in recent years, Thomas Steffen, the ministry’s state secretary, contended in the report.
“The achievements made so far suggest that we should stay on the chosen path, although a good bit of the journey to overcoming the debt crisis still needs to be traveled,” Steffen wrote, according to the Bloomberg News coverage of the report. “It would be tragic to change the direction now. Budget deficits would rise again, and confidence that is slowly gaining would again be threatened.”