BERLIN , — Wednesday’s revision by the German government’s panel independent economic advisors to its 2021 growth forecast for Europe’s largest economy was 2.7%. This is the latest in a series downgrades made by forecasters.
The new forecast by the panel was lower than the March prediction of 3.1%. The panel forecast that the gross domestic product would grow by 4.6% in 2022. Next year, it expects the economy to return to pre-pandemic levels in the first quarter.
Germany’s recovery from coronavirus pandemic has been slowing down than expected due to concerns about higher energy costs as well as stubborn bottlenecks in raw materials and parts.
Volker Wieland, a panel member, stated that the economic recovery is still possible. It is delayed until the bottlenecks dissolve bit by bit.
The resurgence in COVID-19 infections is also alarming, but German authorities are trying to avoid blanket lockdowns like those imposed during previous surges.
The economic advisors stated that there is “great uncertainty” about the future performance of the economy. The recovery could be hampered by continued restrictions on health and supply that lasts for a long time.
However, they said that inflation could fall again next year after an acceleration in recent months.
Official data shows that Germany’s GDP increased by 1.8% between July and September compared to the previous quarter. This follows a 1.9% increase in the second quarter, and a 1.9% decrease in the first quarter. The most recent month’s export and factory orders figures were disappointing.
German officials also reduced their full-year growth forecast from 3.5% in April to 2.6%. GDP fell 4.9% last year.
