Germany Feels the Trade-War Heat as Economic Outlook Slashed

(Bloomberg) -- German economic growth is being held back by restraints at home and abroad, including rising protectionism that’s creating uncertainty about the global outlook, according to five of the nation’s leading research institutes.

In a report for the German government, the institutes cut their 2018 growth prediction to 1.7 percent from 2.2 percent. That’s below the consensus in Bloomberg’s monthly survey and would mark the weakest performance since 2015. The prediction for next year was trimmed to 1.9 percent from 2 percent.

Germany Feels the Trade-War Heat as Economic Outlook Slashed

Weaker demand for exports and a shortage of labor are weighing on growth, while risks include trade conflicts, a disorderly Brexit and a potential Italian debt crisis, according to the report. These same issues are hitting growth in the euro area. A report later on Thursday is forecast to show economic confidence fell for a ninth straight month.

“The upturn in the German economy is entering its sixth year but is losing momentum,” the institutes said. “There is great uncertainty about the continuation of the global expansion.”

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