June 13, 2019 / 8:47 AM / 3 months ago

German economic outlook muted for second quarter, predicts ministry

FILE PHOTO: Trains of German railway Deutsche Bahn arrive at the main train station in Frankfurt, Germany, March 27, 2019. REUTERS/Kai Pfaffenbach/File Photo

BERLIN (Reuters) - The outlook for Europe’s biggest economy is subdued for the second quarter due to headwinds from global trade conflicts that are weighing on the export-dependent industrial sector, Germany’s Economy Ministry said on Thursday.

Fears are mounting that German growth will slow or even stall in the second quarter. The economy grew 0.4 percent in the January to March period after just skirting recession in the last three months of 2018.

“After significant growth in gross domestic product in the first quarter, the prospects for the second quarter remain subdued,” the ministry said in its monthly report. However, it struck a more positive note for later in the year.

“After the muted developments in the second quarter, positive influences should take hold more forcefully with a gradual improvement of the external environment,” it added.

German manufacturing has suffered from trade disputes between the United States and both China and the European Union, with German industrial output and exports falling sharply in April.

The ministry said an improvement in the services sector was helping the economy and recent data pointed to a continuation of the contrasting developments in services and manufacturing.

Reporting by Madeline Chambers; Editing by Michelle Martin

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