DIW cuts German growth forecasts for 2018, 2019
Berlin-based research institute, DIW, releases their revised growth forecasts for the German economy this year and next
- GDP to grow 1.9% in 2018 (prior forecast 2.4%)
- GDP to grow 1.7% in 2019 (prior forecast 1.9%)
They are citing the changes to the surprisingly weak start to the year and also the increasing uncertainty regarding the global economy. The risks they see for the latter are concerns surrounding Italy and an escalation in the US-EU trade conflict.
DIW notes that uncertainty will dampen global company investments, further burdening German export growth.
As noted earlier, the German economy relies heavily on trade and though domestic conditions are holding up well, a further decline in exports will surely poke Germany where it hurts most - particularly if the autos ban by the US creeps into the picture.