German central bank warns world tensions clouding outlook

FRANKFURT, Aug 18 : Germany's central bank on Monday warned that global tensions including the Ukraine crisis have clouded its outlook for this year, although it does not expect the Europe's biggest economy to shrink further. "A flurry of unfavourable news reports relating to the international environment have dampened Germany's economic outlook in the second half of the year," the Bundesbank wrote in its latest monthly report. "Current indicators cast doubt on the assumption on which the spring forecasts were based, namely that the underlying cyclical trend would strengthen further in the second half of 2014," it said. Nonethe-less, sentiment has deteriorated from a high level, which, together with the fact that the trend for domestic demand remains basically upwards, suggests that the economy will not change direction," the Bundes-bank wrote.    — AFP