The Bundesbank has lowered its growth forecasts for Germany this year and next year.
In its December monthly report, the German central bank predicted the economy would grow by 0.7% in 2012 and then by only 0.4% in 2013, before expanding again by 1.9% in 2014.
AFP reports that in previous forecasts published in June, the Bundesbank had tipped growth of 1% for 2012 and 1.6% for 2013.
"However, there are sound reasons to believe that Germany will soon return to a growth path," the report said.
"The sound underlying health of the German economy suggests that it will overcome the temporary lull without major damage to the labour market, in particular," it said.