(Xinhua)
Updated: 2008-01-15 23:31

German Chancellor Angela Merkel said Tuesday that the country's economic growth will probably slow down in 2008 due to domestic inflation pressures and the impact of the US subprime mortgage crisis.

Germany should be prepared for "weaker economic growth" in the coming year, Merkel told reporters in Berlin.

The top priority is to create job opportunities and continue to cut unemployment, said the Chancellor, ruling out any further tax cuts within the coming two years in order to keep a balanced budget.

German Economics Minister Michael Glos said earlier this month that the growth of the German economy, the biggest in Europe, is likely to miss the earlier estimation of 2 percent.

Germany's business confidence has dropped to the lowest point in two years last December, after the country emerged from a protracted stagnation.

The Munich-based Ifo Institute announced in December that its monthly business confidence indicator slipped from 104.2 in November to 103.0, the lowest since January 2006.

In October, the German government cut its growth forecast for 2008 from 2.4 percent to 2 percent.