BERLIN, Dec. 12 (Xinhua) -- The German Institute for Economic Research (DIW) cut its growth forecast for the German economy on Wednesday.
The DIW institute lowered its forecast for the growth of the German economic output by 0.3 percentage points to 1.5 percent for this year and by 0.1 percentage points to 1.6 percent for 2019.
"Although gross domestic product fell in the third quarter of this year for the first time in a long time, the danger of a recession is low," said Claus Michelsen, economic expert at DIW.
The German gross domestic product (GDP) fell by 0.2 percent in the third quarter of 2018, the first decline since 2015. This was, among other things, due to the fact that many German carmakers had to curb production because some car models did not meet the requirements of the "Worldwide Harmonized Light-Duty Vehicles Test Procedure" (WLTP). Since September, the WLTP is required for all newly registered vehicles.
The DIW institute stressed that there were still many aspects "indicating that the upward trend will continue", albeit at a weaker level. The main reason for this would be the booming construction industry as well as the stable labor market situation.
According to DIW, foreign business would also continue to perform well as long as the smoldering trade conflicts, the Brexit situation and the budget dispute between the European Union and Italy do not escalate.
On Wednesday, the Kiel Institute for the World Economy (IfW) also lowered its growth forecasts for the current year to 1.5 percent from the previous 1.9 percent. In 2019, IfW expects economic growth of 1.8 percent instead of 2.0 percent.
"The upswing will continue into next year, but the downswing should gradually begin in the course of 2019," said Stefan Kooths, head of the forecast center at IfW.
According to IfW, "two special factors" slowed down the German economy in the second half of this year. Besides the difficulties of the German automotive industry with the WLTP emission test standard, the persistent low water levels of the river Rhine and the resulting production impairments were also responsible for the worse growth forecast.
