German top think-tanks cut growth forecast: report

8th October 2014, Comments 0 comments

Germany's four leading economic institutes are cutting their forecast for growth both this year and next year as clouds continue to build over Europe's biggest economy, the daily Handelsblatt reported on Wednesday.

The think tanks -- Ifo of Munich, DIW of Berlin, RWI of Essen and IWH of Halle -- are scheduled to publish their latest updated forecasts in a report on Thursday.

But Handelsblatt said it had obtained a copy of the report, which predicts growth of just 1.3 percent in 2014, instead of the previous forecast of 1.9 percent.

And the outlook for next year has been cut to 1.2 percent from 2.0 percent, the newspaper said.

The institutes' predictions provide a basis for the government's own forecasts.

In April, the government had been pencilling in growth of 1.8 percent and 2.0 percent next year.

However, the economic skies above Germany have been darkening recently as the fallout from the crisis in Ukraine sours sentiment and weighs on investment.

Industrial data released earlier this week came in short of expectations and caused some analysts to downgrade their growth expectations for this year.

© 2014 AFP

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