Germany has downgraded its forecast for economic growth in 2019, as business confidence sinks to a six year low.
According to various reports in Germany, the government expects a 1% growth, down from 1.8% in 2019.
The new estimate will be officially presented on Wednesday by Peter Altmaier, economics minister.
Fears of a slowdown in the global economy and of a disorderly Brexit are the main reasons for the downgrade, according to media reports.
According to the Financial Times:
Meanwhile the Ifo Institute’s business climate index, a closely watched gauge of business sentiment, fell to 99.1 in January from 101 the previous month, the lowest reading since February 2016.
“The German economy is experiencing a downturn,” said Clemens Fuest, head of Ifo. Carsten Brzeski, chief economist at ING Germany, described the Ifo reading as a “shocker”.
He said it suggested that “it could take until the second quarter before the German economy regains momentum.” The poll is the latest of a string of indications that the German economy is in a downturn.
Germany’s GDP grew by 1.5 per cent last year, down from 2.2 per cent in both 2017 and 2016. Businesses have been spooked by the trade conflict between the US and China, a problem that could have severe repercussions for Germany’s export-oriented economy. Exports make up some 50 per cent of German GDP.