IMF halves Germany's 2013 growth outlook, warns of too much budget tightening

BERLIN – The International Monetary Fund is halving its growth forecast for Germany as the euro area's recession continues to hold back the region's largest economy.

In its regular assessment of the country, published Monday, the IMF said that the revised 2013 growth forecast of 0.3 percent, from 0.6 percent two months earlier, is a result of the persistent uncertainty stemming from the eurozone's debt crisis. This has dented both exports prospects and investment for the country.

The organization says Germany therefore should maintain its prudent budget policies to "avoid overperforming on (fiscal) consolidation" which would dent growth.

To address Germany's declining demographic outlook and boost growth, the IMF urges Berlin to lower workers' tax burden, increase the availability of full-time high-quality childcare and facilitate immigration of skilled labor.