German government cuts growth forecast amid trade tensions

BERLIN – The German government has cut its forecast for the country’s economic growth this year to 1.8 per cent from 2.3 per cent, in part because of rising global trade tensions.

The government also trimmed its 2019 outlook for Europe’s biggest economy on Thursday, saying that it now expects 1.8 per cent growth rather than the 2.1 per cent expansion it predicted in April. Last year, gross domestic product grew 2.2 per cent, Germany’s strongest performance in six years.

Economy Minister Peter Altmaier said a statistical revision and delays in registering new cars accounted for most of the change, but “smouldering trade conflicts worldwide” played a part.

He said an escalation of tensions between the U.S. and Europe was averted, but “the underlying problems haven’t yet really been solved” and U.S.-China tensions are affecting global growth.