BERLIN, June 7 (UPI) -- The central bank for Germany cut its growth forecast for this year and next Friday and said the country's economic fate hinges on what happens in the eurozone.
Deutsche Bundesbank President Jens Weidmann said much of what happens to the German economy will depend "on whether the economic situation stabilizes in the euro-area crisis countries," The Wall Street Journal reported.
In its semiannual economic projections, the central bank lowered its growth forecast to 0.3 percent for this year from its December estimate of 0.4 percent. It dropped its figure for 2014 growth to 1.5 percent from its earlier estimate of 1.9 percent.
The Bundesbank's forecasts follow those of the European Commission, the European Union's executive arm, which lowered its 2013 growth outlook for Germany to 0.4 percent from 0.5 percent, the Journal said. The International Monetary Fund also reduced its estimate for German growth in 2013 to "around 0.3 percent" from 0.6 percent.
The Bundesbank said, though, that Germany's economy is picking up as other eurozone economies bottom out and the world economy gains momentum.
Weidmann attributed gains in private consumption to a solid labor market, wage increases and an easing of inflation.
Officials said labor costs in Germany rose during the first quarter. Labor costs for each hour worked rose 3.9 percent from the first quarter of 2012, the sharpest increase in almost four years, the Journal reported.
Data released Friday also indicated German industrial production performed better than expectations in April on strong construction activity.