Germany trims 2018 growth forecast, but outlook still strong

German Chancellor Angela Merkel arrives for the weekly cabinet meeting of the German government at the chancellery in Berlin, Wednesday, April 25, 2018. (AP Photo/Markus Schreiber)

BERLIN (AP) -- The German government trimmed its economic growth forecast for this year to 2.3 percent on Wednesday, though it said the outlook remains good and is predicting that growth next year will be almost as strong.

The new forecast is slightly lower than the government's prediction in January of 2.4 percent growth in 2018. For 2019, officials are forecasting that gross domestic product will expand by 2.1 percent.

That is in line with last year's growth of 2.2 percent, the strongest in six years. Economy Minister Peter Altmaier said that the economy, Europe's biggest, is in a "robust state" and the new forecast is "in a very realistic corridor."

However, he voiced concern about developments in international trade relations and noted that Germany is a major exporter.

The European Union is seeking a continued exemption from new tariffs imposed by U.S. President Donald Trump on steel and aluminum imports.

Altmaier said that while German steel and aluminum exports to the U.S. aren't a huge factor in themselves, his concern is more general — that "such a trade dispute could escalate, and so we would do well to avoid the escalation."

On top of the concerns over trade, data on German factory orders and trade for the first two months of this year have been disappointing. However, many economists argue that talk of a slowdown is premature.

Economic indicators "are in no way pointing to a downturn," Altmaier said. "I think any growth in the region of 2 percent or above is exceptionally good growth, if you compare it with the history of the last 10-15 years in Germany."