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German 'Wise Men' Slash 2019 Growth Forecast

A panel of economic advisers to the German government known as the "wise men" slashed the growth projection for this year to 0.8 percent from 1.5 percent predicted in November, on Tuesday.

The group, officially called the German Council of Economic Experts, forecast 1.7 percent expansion for next year.

Christoph Schmidt, the chairman of the panel, said the boom for the German economy is over now, but a recession is unlikely, thanks to the robust domestic economy.

Economists on the panel attributed the downgrade in forecast to the significantly weaker demand in key export markets as well as to capacity constraints in some industrial sectors such as automobiles and chemicals.

Last week, the Ifo Institute also trimmed its German growth projection for this year to 0.6 percent from 1.1 percent. The think tank also cited the troubles in the industrial sector and the weakening demand for German exports as reasons for the downgrade.

However, the outlook for next year was raised to 1.8 percent from 1.6 percent as Ifo expects the production difficulties to be gradually overcome and private consumption to remain robust.

On Monday, the Bundesbank said in its monthly report that the German economy is unlikely to rebound in the first quarter as the manufacturing slowdown continued.

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