The federal government has lowered its growth forecast for 2019 to 0.5 percent, down from an already lowered estimate of 1.0 percent. Initial gross domestic product (GDP) growth expectations for this year were once as high as 1.8 percent. However, the German government is insisting momentum is expected to pick up in 2020 where growth of 1.5 percent is expected. Economy Minister Peter Altmaier said trade disputes and Brexit uncertainty were weighing on the German economy.
Meanwhile the production and industrial sector has been hit by new car emission regulations (WLTP) and unusually low Rhine water levels.
Mr Altmaier said: “The economic development in Germany has cooled since the middle of last year.
“The good news is – we will overcome this phase of weakness in the future.”
Writing in a report earlier this month, Mr Altmaier described the German economy as “showing a mixed picture”.
He continued: “Services and construction in particular remain in good shape.
“The industrial sector is going through a weak phase due to the slowing world economy.”
Germany has sparked fears of an overall slowdown in growth after a string of weak data releases pointed to the economy grinding to a halt.
This month revealed isappointing trade activity revealed exports and imports fell more than expected in February.
The Federal Statistics Office said seasonally adjusted exports were down by 1.3 percent on the month.
This marks the biggest drop in 12 months, while imports fell 1.6 percent.
Last month the International Monetary Fund (IMF) to spend more to boost economic growth and reduce its current account surplus.
Head of the IMF’s European department Poul Thomsen also said wages in Germany should rise more to better reflect the fall in unemployment.
He said: “We continue to see a case for Germany to increase spending or cut taxes to boost growth.
“Looking forward, given the fiscal space Germany has, we can see reforms over several years that would boost spending.
“We need to see more and keep it coming.”
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