The german institute for economic research (DIW) lowered its forecast for 2018 from 2.4 percent in march to 1.9 percent now.
The scientists pointed to an "unexpectedly weak start to the year" and see "high risks" on many fronts. This allowed the trade conflict with the U.S. To escalate further and the debt crisis in italy to worsen.
For 2019, the DIW expects gross domestic product (gdp) to increase by 1.7 percent, compared to 1.9 percent three months ago.
Despite the slight slowdown in the economy, the german economy is still in good shape, according to the DIW. Private consumption remains an important pillar of the economy. Unemployment will continue to fall, to a rate of 5.2 percent this year and 4.9 percent next year.
The problems with the USA and italy led to restraint, falling investment by german companies and lower exports, explained DIW economic director ferdinand fichtner. In the trade conflict with the u.S., "germany, as an export-rich economy, has a lot to lose".