Growth to Slow Next Year as Debt Crisis Persists, BGA Business Group Says

German economic growth could slow by more than half next year as fellow euro-region countries continue to struggle with the debt crisis, the BGA wholesale and export federation said.

Growth in Europe’s biggest economy could weaken to as little as 1.25 percent in 2011 after expansion of 3 percent this year, BGA head Anton Boerner said today, as the group released a wholesale report. Export-led growth in 2010 will give way to more economic pain as investors balk at debt levels, he said.

“Even though we’re doing better than our neighbors, we’re only cautiously optimistic looking into the fourth quarter and next year,” Boerner said in an e-mailed statement. “The causes lie in the risks from the unsolved debt and monetary problems. The crisis continues to smolder.”

Wholesalers will see 10 percent growth in nominal terms this year, and 6.5 percent in real terms, as exports lead the country out of the financial slump, the BGA said.

To contact the reporter on this story: Patrick Donahue in Berlin at at pdonahue1@bloomberg.net.

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