Economy Slows in Second Quarter

According to the German Finance Ministry, high oil prices depressed the expansion of exports, likely slowing the nation's economy significantly in the second three months of 2005. Germany's economy grew by one percent in the previous three months, the strongest rate in four years. The subsequent slowdown has not come as a complete surprise, as economists had already warned that the pace of growth would fall later in the year. "Although the domestic economy shows slight signs of stabilization, high oil prices seem to weigh on demand from abroad," said the Finance Ministry in its June report. The country's leading economists are predicting growth of 0.7 percent for the entire year; the government is targeting one percent growth.