A panel of economic advisors to the German federal government known as the “wise men” slashed the growth forecast for this year to 0.8 percent from 1.5 percent anticipated in November, on Tuesday.
The group, officially called the German Council of Economic Experts, projection 1.7 percent growth for next year. Christoph Schmidt, the chairman of the panel, said the boom for the German economy is over now, but an economic crisis is unlikely, thanks to the robust domestic economy. Financial experts on the panel attributed the downgrade in forecast to the considerably weaker need in crucial export markets in addition to capability constraints in some industrial sectors such as cars and chemicals. Last week, the Ifo Institute likewise cut its German growth forecast for this year to 0.6 percent from 1.1 percent. The think tank likewise cited the troubles in the commercial sector and the damaging need for German exports as factors for the downgrade. The outlook for next year was raised to 1.8 percent from 1.6 percent as Ifo expects the production difficulties to be slowly overcome and private usage to remain robust. On Monday, the Bundesbank stated in its month-to-month report that the German economy is not likely to rebound in the first quarter as the production slowdown continued.
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