Germany reduces growth expectations due to a trade war and Brexit

Posted by Maryam Yamin on January 30th, 2019

 According to MAG Mania, The German Ministry of Finance has adjusted the economic growth forecast for 2019 from 1.8 per cent to 1 per cent, as Minister Peter Altmaier of Finance announced on Wednesday.

With the adjusted forecast, economic growth will decline for the second year in a row. In 2018 the German economy grew by 1.5 per cent, a year earlier that was still 2.2 per cent.

"External factors mainly cause the increasing headwinds," says Altmaier. He writes that economic growth is mainly adjusted downwards by Brexit, international trade conflicts and the international tax environment.

Earlier in January, the international monetary fund (IMF) already reduced Germany's economic growth forecast. The IMF assumes growth of 1.3 per cent. Previously, the think tank expected economic growth of 1.9 per cent.

The IMF specifically pointed to the German car industry, which is being troubled by global trade problems. The IMF also expects weaker consumption. Washington think tank also reduced global economic growth.