BERLIN, July 25 (Reuters) - The German government still expects Europe's largest economy to expand by 0.7 percent this year, an economy ministry spokeswoman said on Wednesday, after a key indicator of business morale fell to the lowest level in more than two years.
"(The Ifo indicator) shows that uncertainty in the euro zone has increased. The euro debt crisis raises the risk for our economy as well but at the same time our economy has a high degree of growth and resitance. Our situation is robust," the spokeswoman said.
"That's why it is likely that the government's cautious growth expectations presented in spring will be confirmed. That envisages growth of +0.7 percent for this year."
German Ifo business sentiment dropped in July for the third straight month to the lowest level since March 2010, in a sign that a renewed flare-up of the euro zone sovereign debt crisis is not sparing German business. (Reporting by Annika Breidthardt and Stephen Brown)