The Bundesbank downgraded its forecasts for German inflation and growth on Friday, but said the economy’s underlying cyclical trend is fairly robust, driven by buoyant domestic demand.

    The German central bank said it now expects the economy to grow by 1.7% this year, down from a previous forecast of 1.8%. For 2017, it expects growth of 1.4%, down from 1.7%. It forecasts growth of 1.6% for 2018.

    "Compared with the projection from December 2015, expectations for economic growth in 2016 and 2017 have been slightly lowered, while inflation projections have been brought down significantly," the Bundesbank said.