A worker checks the frame of a BMW automobile along the production line at the BMW plant in Munich, Germany.

The powerhouse German economy will no longer outperform the euro zone in 2017 according to a new report from Morgan Stanley.

Germany is the largest economy in Europe with a nominal gross domestic product (GDP) in 2016 of $3.5 trillion, according to the International Monetary Fund (IMF).

The country, a founding member of the European Union, is often lauded for its skilled manufacturing base and strong export surplus.

However a new note Tuesday from Morgan Stanley's chief European economist, Elga Bartsch, suggests the German engine may be spluttering.

Citing external headwinds, the note forecasts German GDP growth will slow from 1.5 percent this year to just 1 percent next year, no longer outperforming the wider euro zone.

Morgan Stanley data said the last time that occurred was 2009.