German forecasters cut 2019 growth outlook to 0.5%

October 02, 2019 - 4:04 am

BERLIN (AP) — A group of leading think-tanks is joining the government and others in cutting its growth outlook for the German economy, predicting that output will expand by only 0.5% this year and 1.1% in 2020.

The economic institutes' forecast Wednesday was down from their prediction in spring that the economy — Europe's biggest — would grow by 0.8% this year and 1.8% in 2020.

The economy contracted slightly in the second quarter and is widely believed to have shrunk further in the just-concluded third quarter, which would put it in a technical recession.

The think-tanks pointed to political uncertainty such as trade tensions and the risk of a no-deal Brexit; declining global demand for investment goods such as factory machinery in which Germany specializes; and "structural changes" in the auto industry.

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