German industrial activity is sluggish and recent data point to slower growth in the service sector, the German Economy Ministry said, adding this suggested Europe's largest economy would experience a weak general economic trend in the second quarter.

"After what is shaping up to be a subdued development in the second quarter, the forces of economic upswing could become more prominent again if the external environment settles," the ministry said in its monthly report.

But it added that there were significant downside risks such as trade conflicts, Britain's expected departure from the European Union and geopolitical tensions.