* Economy Minister Altmaier presents spring forecast
* Berlin sees growth of 0.5 pct in 2019, 1.5 pct in 2020
* Trade disputes, Brexit weighing on economy
* Government to pour billions in R&D incentives (Adds president of Ifo institute)By Michael NienaberBERLIN, April 17 (Reuters) - The German government is eyeingincentives to boost corporate research and development aftercutting its forecast for 2019 economic growth for the secondtime in three months, reflecting a worsening slowdown driven bya recession in manufacturing.German exporters are struggling with weaker demand fromabroad, trade tensions triggered by U.S. President DonaldTrump's "America First" policies and business uncertainty causedby Britain's planned departure from the European Union.The difficult trade environment means that Germany's vibrantdomestic demand, helped by record-high employment,inflation-busting pay increases and low borrowing costs, isexpected to be the sole driver of growth this year and next.To counter the slowdown, Finance Minister Olaf Scholz plansto support corporate research and development with incentivesworth 1.27 billion euros ($1.43 billion) annually from 2020, adraft law seen by Reuters showed on Wednesday.Companies doing basic research or industrial development canapply for a bonus of up to 500,000 euros per year, with theincentives not limited to small- and medium-sized firms asoriginally planned, according to the draft law.Cabinet is expected to pass the measures in mid-May.Germany's BDI industry association urged the government tooffer more incentives for climate-friendly corporate investmentand to slash taxes for companies."The best times for the economy are over," BDI ManagingDirector Joachim Lang said. "The government must not lose anymore time."Presenting the government's spring forecast, EconomyMinister Peter Altmaier said on Wednesday that Berlin nowexpects gross domestic product to grow 0.5 percent this yearafter an expansion of 1.4 percent in 2018. The government had already cut its 2019 forecast in Januaryto 1.0 percent growth from 1.8 percent previously.For 2020, the government sees a consumption-driven reboundwith economic growth of 1.5 percent.
TRADE SURPLUS SHRINKSAltmaier said the slowing world economy, trade disputes andBrexit uncertainty were weighing on the German economy. Domesticfactors include the introduction of new car-emission regulationsand unusually low Rhine water levels, which have led to supplyand production bottlenecks.Import growth is expected to surpass export growth in both2019 and 2020, which is likely to reduce the large trade surplusfurther."The current account surplus will continue to shrinkcontinuously and will go down to 6.4 percent (of GDP) in 2020,"the economy ministry said in its forecast.Clemens Fuest, president of the Ifo institute, toldSwitzerland's Handelszeitung newspaper that a 'no-deal' Brexitor U.S. tariffs on European cars would hit Germanydisproportionately hard, and could push the European economyinto a recession and reignite the euro crisis.Government measures such as higher child benefits andincreased pensions for mothers will give the economy anadditional boost this year, Altmaier said.He called on Scholz and his centre-left Social Democrats,the junior partners in Chancellor Angela Merkel's coalition, tosupport tax cuts for companies and agree on refraining from anymeasures that could burden the private sector.While rejecting calls for consumption-oriented fiscalstimulus, Altmaier said Berlin should now focus on supportingcompanies by cutting red tape and lowering corporate levies.Scholz told the world's financial elite gathering inWashington last week that Berlin is already spending its recordbudget surplus on investment in infrastructure and support forfamilies with low or medium incomes.A Finance Ministry spokeswoman said that Scholz sees no needfor a broader overhaul of the corporate tax system.
($1 = 0.8854 euros) (Reporting by Michael NienaberAdditional reporting by Holger Hansenediting by Larry King and Toby Chopra)