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German central bank cuts GDP forecasts through 2019


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German central bank cuts GDP forecasts through 2019

Germany's central bank trimmed its forecasts for the country's GDP through 2019 as growth momentum across the eurozone faces moderation.

Deutsche Bundesbank now projects calendar-adjusted GDP growth in Germany to reach 1.5% in 2018, down from a June projection of 2.0%. Germany logged its first quarterly contraction since 2015 in the third quarter due to weaker exports.

The automobile sector was hit in particular amid new EU-wide rules on exhaust emissions, the central bank said, adding that such factors are likely temporary.

For 2019, the central bank forecasts GDP to expand 1.6%, down from a prior estimate of 1.9%.

Inflation is estimated to come in at 1.9% for 2018, compared with a previous forecast of 1.8%. Harmonized consumer prices are expected to rise 1.4% in 2019, down from a prior estimate of 1.7%.

The European Central Bank on Dec. 13 slashed its GDP growth outlook for the single-currency area to 1.9% in 2018 and 1.7% in 2019, citing political tensions and the threat of trade protectionism.