BERLIN, June 18 (Reuters) - The Ifo institute on Tuesday cut its 2020 growth forecast for the German economy to 1.7% from 1.8% previously as a manufacturing recession spills over into other sectors of Europe's biggest economy.
"There is a diverging economic development: the export-oriented manufacturing sector, which accounts for about a quarter of economic output, is in recession," Ifo economist Timo Wollmershaeuser said.
At the same time, domestic service providers and the construction industry are enjoying robust growth, he added.
"However, there are increasing signs that the weakness in the industrial sector is gradually spilling over into the domestic economy via the labour market and value creation chains," he said.
(Reporting by Michael Nienaber, Editing by Joseph Nasr)
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