BERLIN (AP) -- A group of leading German economic think tanks on Thursday cut their forecast for growth this year in Europe's biggest economy to 1.8 percent amid fallout from the U.S. subprime lending crisis and turbulence in global financial markets.
The four institutes' 2008 growth outlook was down from the 2.2 percent they predicted last October. They forecast slower growth of 1.4 percent next year.
The institutes said in their twice-yearly report that ''the crisis in the real estate and financial sector in the U.S.A. constitutes the biggest downside risk for the world economy.''
Still, they said that the German economy appeared to have started this year ''with a great deal of momentum,'' despite the euro's rise to new records against the U.S. dollar, surging oil prices and U.S. economic weakness.
''The German economy apparently has become more robust in the last few years; as a result, the danger of a recession is smaller today,'' they added.
''All in all, a noticeable slowing of economic expansion is to be expected as a consequence of the powerful shocks, but the institutes believe a slide into recession is unlikely,'' the report said.
Germany's gross domestic product grew by 2.5 percent in 2007, a little below the previous year's level of 2.9 percent.
Thursday's report still puts the economic institutes' 2008 outlook slightly above that of the German government, which in January predicted growth of 1.7 percent.