Germany officially slashes 2019 GDP forecast to 1% - EUR/USD ticks down

The German Economy Ministry has confirmed that it has drastically reduced forecasts for Gross Domestic Growth for 2019 from 1.8% to 1%. Europe's largest economy is due to suffer from a worsening external environment according to the ministry. Protectionism, Brexit, and taxes are listed among risk factors.

While net trade is expected to weigh on growth, forecasters see private consumption as increasing. 

EUR/USD shed a few pips on the news, but tension remains high ahead of the all-important Fed decision later in the day. Germany will release preliminary inflation figures for January shortly. 

The German economy contracted in the third quarter and barely escaped a second consecutive quarter of declines according to initial estimates by the central bank, the Bundesbank.