BERLIN (Reuters) - Germany's leading economic institutes halved their 2013 growth forecast for Europe's largest economy to 0.4 percent on Thursday, citing a significant downturn in industrial production during the winter.

The institutes, whose analysis flows into the German government's own economic forecasts, also trimmed their estimate for growth next year to 1.8 percent, down from the 1.9 percent they had predicted in April.

"The German economy is on the cusp of an upturn which will be driven by domestic demand," they said in a statement.

Exports will increase modestly thanks to stronger global growth while imports will get a big boost from domestic demand, meaning that foreign trade will probably drag on growth, they added.

(Reporting by Michelle Martin; Editing by Noah Barkin)