The International Monetary Fund (IMF) has cut its 2010 growth projection for the German economy. The IMF now expects Europe's largest economy to grow by 1.2 per cent this year, down from its previous estimate of 1.5 per cent. Explaining the downward revision, the IMF highlighted weakness in the German banking sector, and the chance of lower than expected levels of global trade. In its report, the IMF said the German economy faced substantial downward risks in 2010, and that economic recovery is likely to be moderate and fragile. The German economy exited recession last year, but failed to grow in the three months from October to December.