Eurozone economic slowdown predicted in Q2

The eurozone countries' gross domestic product (GDP) is set to grow by 0.3 percent in the second quarter of 2019, the German Ifo Institute for Economic Research said in its economic outlook for the eurozone published here on Wednesday.

Ongoing trade conflicts, political uncertainties and a cooling-off of the global economy would likely see GDP growth in the eurozone decline slightly compared to the 0.4 percent growth registered in the first quarter of 2019.

The report, which Ifo compiled jointly with the Italian National Institute of Statistics (Istat) and the Swiss Economic Institute (KOF), stated that eurozone exports and imports "decelerated" in the first quarter in line with a "declining world trade".

"Economic momentum in the eurozone is expected to pick up slightly in the second half of 2019," Ifo's eurozone expert Pauliina Sandqvist told Xinhua.

Industrial production in the eurozone countries increased "unexpectedly strongly" by 0.9 percent in the first quarter of this year. In April, however, industrial production decreased by 0.5 percent. Capital goods, such as large machinery or consumer durables like cars and consumer electronics, were particularly affected.

The eurozone's largest economy, export-oriented Germany was hit by the negative effects of global trade conflicts. Most economic research institutes as well as Germany's government have lowered their economic forecast for the country for 2019.

Domestic demand is expected to remain stable, but Germany's exporting business are likely to suffer from "fluctuations in foreign demand" caused by global trade conflicts and the United Kingdom's (UK) pending withdrawal from the European Union (EU), the German Institute for Economic Research (DIW) said.

In April, the German Federal Statistical Office (Destatis) reported that production in Germany's important industrial sector had decreased by 1.9 percent compared to the previous month.

Both Germany and the other eurozone economies had been supported by "domestic demand," according to the Ifo institute.

However, the institute warned that "downside risks" for economic development in the eurozone remain high, especially in the autumn of 2019, when the UK is scheduled to leave the EU.

In addition, an eventual decision by the United States to introduce car tariffs on the EU and Japan would have "substantial negative effects" on the eurozone's GDP, Ifo said.