"Growth in domestic demand will probably not be as dynamic as it
was during the boom period of previous years," the Bundesbank
said in its biannual report on the economy.
"This is due mainly to households’ real disposable income, which
fell primarily on the back of a significant slowdown in
employment growth."
The central bank halved its real GDP growth prediction for next
year to 0.6%, bringing it in line with the consensus of private
sector economists.
It also trimmed its forecast for this year by 10 basis points to
0.5% while raising its 2021 estimate by the same amount to 1.4%.
"For economic growth and, to a lesser extent, for the rate of
inflation, the risks are tilted to the downside as things stand
today," the Bundesbank said.
(Reporting By Francesco Canepa; editing by John Stonestreet)
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