FRANKFURT, Germany (AP) — Growth in Germany, Europe's biggest economy, is likely to slow next year because greater risks to the global economy could lead to a drop in exports, the government's Council of Economic Advisers warned on Wednesday.
The council, which helps advise the government on economic matters, said that demand for German-made goods, including appliances, automobiles, steel and other products, would drop.
Germany is the world's top exporter, ahead of China and the United States.
The council's report predicted that that Germany's gross domestic product, which was up 2.9 percent in 2006, would grow 2.6 percent this year, and then slow to 1.6 percent next year.
In its last report, released in November 2006, the council had forecast growth of 1.8 percent in 2007.
The new forecast came on the heels of the government's own predictions of 2.4 percent growth this year and 2 percent next year. Meanwhile, Germany's leading economic research institutes have forecast 2.6 percent growth this year and 2.2 percent in 2008.
The council said that Germany's economic expansion would ''slow because global economic risks have increased.''
However, it added that ''because of the good state of the German economy, this is no indication that the upswing will be disrupted or that we are facing a recession.''
Germany has been emerging over the past two years from a lengthy period of economic stagnation that pushed up unemployment and prompted Germans to tighten their spending, leading to slack consumer demand. Much of the current recovery has been powered by increased exports into the world economy.