German economic growth forecasts slashed over trade war fears

Germany's economy is expected to grow more slowly in the coming years due to the risks around a euro crisis sparked by Italy and a potential trade war with the US.

The influential Ifo Institute slashed its gross domestic product growth forecasts for 2018 to 1.8% from its previous estimate of 2.6%, which will represent a slowing from the 2.2% GDP growth in 2017.

For 2019, the Ifo cut its forecast to 1.8% from 2.1%.

“The economy developed significantly more weakly than anticipated in the first few months of the year,” Ifo economist Timo Wollmershaeuser said.

“The global economic risks have risen significantly,” he added.