Germany's leading economic institutes have revised down their growth forecast for Europe's biggest economy for this year, two sources with knowledge of their decision told Reuters today. 

The revisions feed into the government's own output projections.

They reflect growing concerns that a slowdown in Germany driven by a recession in the export-dependent manufacturing sector could hamper the broader euro zone economy. 

The institutes expect the German economy to grow by 0.5% this year, two sources said. 

One of the two sources said growth of 1.1% is expected in 2020. 

The institutes had said in April they expected growth of 0.8% this year and 1.8% in 2020.

The institutes, which will present their new growth forecasts on Wednesday, foresee an expansion of 1.4% in 2021, one source said.

Meanwhile, German annual inflation unexpectedly slowed for the third consecutive month in September, data showed today.

The figures lend support to ECB policymakers who argue more monetary stimulus is needed to guarantee price stability in the euro zone. 

German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 0.9% year-on-year after an increase of 1.0% in the previous month, the Federal Statistics Office said. 

The September reading was the lowest since November 2016 and undershot a Reuters forecast for 1.0%. 

It also marked the fifth month in a row that the inflation figure remained well below the European Central Bank's target level of close to but below 2% for the euro zone. 

On the month, EU-harmonised prices fell by 0.1% after a decrease of 0.1% in the previous month. The market had expected an unchanged reading.