BERLIN – Germany’s government cut on Thursday its economic growth forecasts for this year and the next, citing global uncertainty, but stressed that the underlying upswing remains intact.
Germany’s economic growth is now expected to come in at 1.8 percent this year, rather than the 2.3 percent forecast previously, the government said on Thursday in its autumn report. Next year’s expansion is now seen at 1.8 percent instead of 2.1 percent.
The eurozone’s largest economy expanded by 2.2 percent last year.
“The German economy is still in an upswing and will continue this upswing for the tenth consecutive year next year – the longest upswing period since 1966,” said Peter Altmaier, Germany’s economics minister.
“The domestic economy will continue to remain an import pillar of the economic performance. Uncertainties regarding its future performance are caused by increasing protectionist tendencies and international trade conflicts. They harm all parties involved,” he said.
The forecast cuts highlight the European economic powerhouse’s Achilles heel as an export-driven economy that is vulnerable to global trade tensions.
The German government forecasts export growth will accelerate by just 2.8 percent this year compared with 4.6 percent in 2017 on the back of weaker global demand, before accelerating by 3.7 percent next year.
Earlier this week, the International Monetary Fund cut its growth forecasts for Germany to 1.9 percent for both this year and the next, decreases of 0.3 and 0.2 percentage points respectively.