Economists clip growth forecasts, Germany faces downside risks
Financial institutes in Germany clipped their growth forecasts for this year amid weaker global demand for manufacturing goods peppered with unrelenting uncertainty issues brought by trade conflicts.
The revisions of forecasts reflect a pessimistic outlook of the German economy capped by a slowdown. However, Economy Minister Peter Altmaier said there was no economic crisis and that there is no need to give up the ‘black zero’ budget policy of avoiding new debt.
“I stick to my position that a debate about the ‘black zero’ now is the wrong subject at the wrong time,” said Altmaier.
According to the German institutes, the economic growth will be at 0.5% for this year and 1.1% in 2020. The April predictions marked 0.8% in 2019 and 1.8% for next year.
“An economic crisis with a pronounced underutilization of the German economy is not in sight, although the cyclical downside risks are currently high,” according to the institutes, marking the Brexit as another potential risk.
Meanwhile, the government will be publishing its revised growth markers on Oct. 17. It previously posted 0.5% for this year and 1.5% for next year.