Germany’s leading economic institutes on Wednesday slashed their growth forecasts in Europe’s biggest economy for this year and next.
They blamed the weaker global demand for manufacturing goods and increased business uncertainty amid trade disputes, reports Reuters.
The revisions, which feed into the government’s own output projections, reflect growing concerns that a slowdown in Germany driven by a recession in the export-dependent manufacturing sector could hamper the broader euro zone economy.
The institutes said they now expect the German economy to grow by 0.5 per cent this year and 1.1 per cent in 2020. This compared with their April estimates of 0.8 per cent and 1.8 per cent respectively.
“An economic crisis with a pronounced underutilisation of the German economy is ... not in sight, although the cyclical downside risks are currently high,” the institutes said.
For 2021, the institutes predict a mild recovery with an economic expansion of 1.4 per cent.
The government is due to publish its latest growth forecasts later this month. In April, it predicted growth of 0.5 per cent for 2019 and 1.5 per cent for 2020.
