Forex

KIEL, Germany - The IFW research institute cut its 2009 GDP growth forecast for Germany to 1.2 pct from a previous estimate of 1.6 pct but confirmed that it expects growth of 1.9 pct this year.

It said industrial production started dynamically this year but forecast a slowdown in the months to come.

The institute also expects international demands for German goods to decline due to the strong euro and the weaker global economy.

IFW also sees economic growth in the euro zone slowing down and forecast GDP growth of 2.0 pct this year and 1.5 pct next year.

For the US, the institute forecast growth of 1.6 pct this year and 2.0 pct in 2009.

'The financial crisis will weigh on the real economy of the industrialised countries for some time,' IFW said in a statement.

In addition, the risk of a US recession remains 'considerable'.

However, the institute expects growth dynamic in emerging markets to remain strong and while forecasting a slowdown of global growth it does not expect a steep dip.