Germany's economic growth is expected to slow to 0.6% in 2019 from 1.5% a year ago, before picking up speed to a calendar-adjusted 1.4% in 2020, according to the ifo Institute.

On an unadjusted basis, the economy is expected to grow 1.8% in 2020, ifo said. The research institute previously expected German economic growth to reach 1.1% in 2019 and 1.6% the year after.

Consumer spending is expected to rise on the back of strong wage increases and a low inflation rate, among others. The construction industry is also likely to remain strong as interest rates remain low, ifo said.

However, the German manufacturing industry is unlikely to drive the domestic economy in 2019, ifo said, as global demand for German products is weak amid slowing economic growth across the globe.

The forecast assumes an orderly Brexit, no further escalation in global trade tensions and no change in the risk premiums on Italian government bonds.