Germany cuts 2014 growth forecast from 1.8% to 1.2%

Economy Minister Sigmar Gabriel said Germany would not be changing its economic policies

The German government has sharply cut its economic growth forecast for this year and next, citing "external" factors for the revision.

It now expects growth this year to be 1.2%, down from its previous estimate of 1.8%. Next year, it expects the economy to grow by 1.3%, down from 2%.

A slowdown in the eurozone economy has hit German exports in recent months.

Economy Minister Sigmar Gabriel said there was no reason for the government to change its economic policies.

The German economy - Europe's largest - contracted by 0.2% between April and June this year, while figures released last week showed that exports fell by 5.8% in August, the largest monthly drop in five years.

These followed weak industrial output figures and recent surveys showing a fall in business confidence.

'Solid growth'

Announcing the revised growth estimates, Mr Gabriel made it clear the government believed Germany's woes were not the result of troubles at home.

"The German economy finds itself in difficult external waters," he said.

"Domestic economic forces remain intact, with the robust labour market forming the foundation.

"As soon as the international environment improves, the competitiveness of German companies will bear fruit and the German economy will return to a path of solid growth."

For this reason, Mr Gabriel said there was "no reason to abandon or change our economic or fiscal policy".

Concerns about economic growth are not limited to Germany and the eurozone.

Last week, the International Monetary Fund cut its forecast for global economic growth for this year and next, warning that the recovery was "weak and uneven".