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Germany to halve 2019 economic growth forecast to 0.5 percent: Spiegel

FILE PHOTO: Aerial view of containers at a loading terminal in the port of Hamburg, Germany August 1, 2018. REUTERS/Fabian Bimmer

BERLIN (Reuters) - The German government is expected to halve its economic growth forecast for 2019 to 0.5 percent from 1.0 percent due to weaker exports in the wake of global trade tensions, the news magazine Der Spiegel reported late on Thursday.

It said the new forecast for Europe’s largest economy, which is to be released next Wednesday, could still change marginally.

The government expects gross domestic product to grow by 1.5 percent in 2020, partly because of positive calendar effects from four public holidays falling on weekends, Spiegel reported.

Germany’s leading economic institutes last week also revised down their 2019 growth forecast to 0.8 percent from a previous estimate of 1.9 percent.

New data released this week showed that German exports and imports had fallen more than expected in February.

Germany’s economy is facing headwinds from a slowing world economy, global trade disputes and the threat of Britain leaving the European Union without a deal. Its manufacturing sector is in recession as exporters bear the brunt of weaker demand.

The export-dependent economy has been relying on consumption and state spending for growth, helped by a solid labor market and low interest rates, but last year posted its weakest growth rate in five years.

The weaker growth forecast will inform Germany’s tax forecast, to be released in May.

Reporting by Andrea Shalal; Editing by Kevin Liffey