2018.07.0501:58:00UTC+00IMF: Germany's Growth Set To Moderate In 2018

Germany's economic growth is set to moderate in the near term as rising protectionist trends, geopolitical uncertainty, or a reassessment of sovereign risk in the euro area could lead to bouts of financial turbulence, the International Monetary Fund said in a report on Wednesday.

Concluding the Article IV consultation with Germany, the Executive Board of the International Monetary Fund said the largest euro area economy will grow 2.2 percent in 2018 and 2.1 percent next year.

The board observed that the outlook is for the expansion to continue in the near term but slow markedly over the medium to long term, reflecting unfavorable demographics and productivity trends.

"Short-term risks are substantial, as a significant rise in global protectionism, a hard Brexit, or a reassessment of sovereign risk in the euro area, leading to renewed financial stress, could affect Germany's exports and investment," said IMF.

Directors recommended Germany to focus on bolstering potential growth by raising public investment in physical and human capital.