The German government slashed its 2019 estimates in half, compared to previous forecasts, as exports weakened due to weak global demand, amid concerns about the negative impact of the US-China trade war and Brexit uncertainty.
The new forecasts announced by Economy Minister Peter Altmaier came in at only 0.5%, following the previous growth forecasts of 1.0% announced in January, while last autumn's forecast was 1.8%.
The continued downgrade in the growth outlook for the German economy, Europe's largest economy, reflects the deterioration of the current economic situation in the European economy in specific and in the global economy in general, which has led the IMF to lower expectations of global growth as well. The growth forecast for 2020 was 1.5%.
The slash in growth expectations have an impact on budget plans of the German Ministry of Finance. Thus, it will be reflected on the tax performance of German companies and sources of government income in general.
It is worth mentioning that the German government will review these forecasts and will release new growth forecasts soon, which may signal slight changes.
As of 12:57 GMT, the euro was 0.61 percent up at $1.1320, the highest
level since late March, set for its first weekly gain in four.