LONDON (ICIS)--Germany’s gross domestic product (GDP) will likely grow by only 0.6% in 2019, Munich-based research group Ifo said on Thursday in cutting its forecast for Europe’s largest economy.
Ifo previously forecast 1.1% GDP growth for 2019. In 2018, Germany’s GDP grew 1.4%.
The group said that Germany was still struggling with difficulties in its industrial production, which would be overcome only gradually.
Global demand for German industrial products was weak, but domestic demand remained a positive, Ifo said.
Overall, industrial production would not be, for the most part, a driver for the country's economy this year, the group added.
For 2020, Ifo forecasts 1.8% GDP growth.
RECESSION NOT LIKELY
Another German research group, Institut fur Makrookonomie und Konjunkturforschung (IMK), said that the recent declines in industrial production and new manufacturing orders were recession risks.
Export demand for German industrial products suffered because of factors such as the Brexit, US trade policies or the slowdown in China's economy, IMK said.
However, German domestic demand remained intact, supported by growing employment, rising wages and salaries, as well as stronger public investments.
Overall, there was currently no case to predict a recession in Germany this year, IMK said.
In related news, German chemical producers’ trade group VCI earlier this week forecast a 3.5% decline in the country’s chemical-pharmaceuticals output this year.