Thursday October 14, 2021
Recovery only next year
Researchers lower economic forecast significantly
The hoped-for catch-up effect after the Corona crisis is apparently still a long time coming: The leading economic research institutes are correcting their growth forecast significantly downwards. The problems in the supply chains are also to blame. The recovery is only supposed to be postponed.
Leading economic research institutes have lowered their economic forecasts for this year. The institutes expect gross domestic product in Germany to grow by 2.4 percent, as they announced on Thursday. In the spring, the economic institutes had expected that after the corona-related collapse of the economy in 2020, gross domestic product would increase by 3.7 percent this year.
The economic situation in Germany is still characterized by the corona pandemic, it said. A complete normalization of “contact-intensive activities” is not to be expected in the short term. It can be assumed that in winter activity in the service sector will remain below the usual level even if there is little infection. In addition, supply bottlenecks hampered the industry.
In the course of 2022, the German economy should return to normal capacity. According to forecasts by the institutes, gross domestic product will rise by 4.8 percent in 2022. In their spring forecast, the institutes assumed an increase of 3.9 percent for the next year. The institutes also expect consumer prices to rise by 3 percent in the current year and by 2.5 percent in 2022. Rising energy prices had recently further fueled inflation in Germany. In September consumer prices rose by 4.1 percent compared to the same month last year, as the Federal Statistical Office announced on Wednesday.
The forecast also said that the public budget deficit is likely to decrease from 4.9 percent in relation to gross domestic product in the current year to 2.1 percent in the coming year. The so-called joint diagnosis of the institutes is prepared twice a year, in spring and autumn – by the German Institute for Economic Research, the Ifo Institute, the Institute for World Economy, the Leibniz Institute for Economic Research Halle and the RWI – Leibniz Institute for Economic research Essen.