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German institutes slash 2019 growth forecast, warn no-deal Brexit could push it lower

German institutes slash 2019 growth forecast, warn no-deal Brexit could push it lower
FILE PHOTO: Aerial view of containers at a loading terminal in the port of Hamburg, Germany August 1, 2018. REUTERS/Fabian Bimmer   -   Copyright  FABIAN BIMMER(Reuters)
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BERLIN (Reuters) – Germany’s leading economic institutes on Thursday slashed their 2019 growth forecast for Europe’s biggest economy to 0.8 percent from their previous prediction of 1.9 percent but warned growth could be much lower still if there is a no-deal Brexit.

The institutes said the risks for the German economy had increased since the autumn, pointing to Britain’s expected departure from the European Union and the trade conflict between the United States and China.

The forecasts were completed as of March 29, the date Britain was originally due to leave the European Union, when the institutes assumed that there would not be a hard Brexit.

The institutes’ estimates feed into the government’s own growth projections, which will be updated later this month. In January, the government forecast growth of 1.0 percent this year.

“The long-term upswing of the German economy has come to an end,” Oliver Holtemoeller, one of the economists involved in the report, said.

(Reporting by Michelle Martin; Editing by Thomas Escritt)

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