IMF to cut German growth forecast for 2012, 2013: paper

The International Monetary Fund will cut its German economic growth forecasts for both this year and for 2013 to 0.9 percent, the Handelsblatt daily said in a preview of an article to be published on Friday.

The business daily, which cited German government sources, gave no reason for the downward revision, which it said the IMF would announce next Tuesday.

The IMF said in July it expected Europe's biggest economy to grow by 1 percent this year and by 1.4 percent next year, helped by strong domestic demand and a robust labor market.

German growth has remained relatively buoyant during the nearly three-year-old euro zone crisis, but recent data have suggested that recession in some parts of Europe and a slowdown in other major markets such as China are weighing on exports and discouraging investment.

PMI surveys released this week showed the German manufacturing sector shrank for a seventh consecutive month in September and business sentiment among service sector providers slid to its lowest level in 3-1/2 years.

In other data published last week, unemployment rose for the sixth month running in September, though it remains close to its lowest level since Germany reunified more than two decades ago.

German economic growth slowed to 0.3 percent in the second quarter of 2012 and many economists now expect a contraction in the third and possibly fourth quarters.

(Reporting by Gareth Jones; Editing by Ruth Pitchford)