Germany's Ifo Institute said that recession is likely in Europe's biggest economy and joined other economic institutes in lowering growth forecasts for 2019 and 2020.

For 2019, Ifo now expects growth of 0.5% compared with a previous forecast of 0.6%. For 2020, the economic institute slashed its growth forecast to 1.2% from 1.7%.

"Like an oil slick, the weakness in industry is gradually spreading to other sectors of the economy, such as logistics," said Timo Wollmershaeuser, Ifo's head of forecasts.

The German economy shrank by 0.1% percent in the second quarter and Ifo expects another 0.1% decline in the third quarter, two consecutive quarters of contraction.

"Technically speaking, that would be a recession," Mr. Wollmershaeuser says. A slight recovery in the fourth quarter plus the 0.4% increase of 0.4% achieved in the first quarter would result in growth of 0.5% for 2019 as a whole.