IMF Cuts German Growth Forecast to 1.5%

The IMF will cut its estimates for German economic growth in 2014 and 2015 to about 1.5 % for each year because of the crises in Ukraine and the Middle East, the weekly German magazine Der Spiegel said on Sunday.

The IMF, which is due to publish the forecasts on Tuesday, predicted in July that Europe’s largest economy would expand by 1.9 % this year and by 1.7% next year.

Der Spiegel said the IMF would also call on the German government to do more to boost public and private investment because this would help to prop up growth in the short term and bring benefits for the country in the medium term.

The finance ministry declined to comment.

Europe’s largest economy had a strong start to the year but shrank by 0.2 % in the second quarter and some economists have warned of the risk that it was in recession between July and September, especially as business and investor sentiment has weakened.

The German finance minister, Wolfgang Schäuble has said that growth this year could miss the 1.8 % currently forecast by the government.

via The Guardian

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