BdB Banking Association Lowered German GDP Growth Forecasts
Economic growth of the Europe's largest economy remains pressured by trade frictions and crisis of emerging markets (EM). The German economy has been relying on private consumption and government spending for growth as exports weaken. The services sector has been providing a cushion against slowing manufacturing output.
The BdB banking association (Association of German Banks) lowered German GDP growth forecasts for 2018 and 2019. According to the projections, the German economy will grow by 1.9% this year and 1.8% in 2019, down from a previous estimate of 1.9%. The BdB has also lowered its forecasts for private investments in machinery and construction for both 2018 and 2019. It expects investments in machinery to grow by 3.1% next year, down from a previous forecast of 3.6%.
Earlier, the German government also lowered its growth forecast for this year to around 2.0%, saying companies were not investing enough to achieve higher growth rates because they lacked skilled workers to increase their output. Last year, the German GDP expanded by 2.2%.