"I'm expecting that we won't experience recession in Germany next year and the economy will once again grow at similar levels as this year," Hundt said.

The German economy has so far managed to fend off the euro zone's troubles, expanding by 4.2 percent in 2010 and 3 percent last year.

The country's gross domestic product in 2012 is expected to grow by about 0.9 percent. In 2013, private economists have forecast GDP to increase by about 0.7 percent, down from mid-2012 predictions of 1.3 percent.

Hundt also said that he was concerned about high wage demands in Germany in 2013 after workers got big increases in 2012 thanks in part to intervention by Chancellor Angela Merkel and members of her cabinet.

Even though unions are calling for big increases again in 2013, Hundt said he was confident wage deals would be moderate.

He said he expected the wage negotiators would continue their flexible policies that differentiated between sectors doing well and others that were struggling.

He was optimistic the unions would factor in the slight economic weakening in Germany this year into their demands.

(Reporting By Gernot Heller; writing by Erik Kirschbaum. Editing by Jane Merriman)

• A Permanent Economic Emergency