Research institutes lower Germany's 2021 GDP growth forecast to 2.4 pct
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E-mail Xinhua, October 14, 2021
BERLIN, Oct. 14 (Xinhua) -- Germany's economic research institutes lowered their expectations for the country's gross domestic product (GDP) growth in 2021 from 3.7 percent to 2.4 percent, according to a joint autumn forecast published on Thursday.
The joint forecast is published twice a year by leading economic research bodies including the Halle Institute for Economic Research (IWH), German Institute for Economic Research (DIW Berlin), ifo Institute, and Kiel Institute for the World Economy (IfW Kiel).
The COVID-19 pandemic "still shapes the economic situation in Germany," the institutes noted. After new waves of infections delayed the economic recovery last winter, GDP rose significantly after infections began to subside in spring this year.
However, supply bottlenecks for intermediate products were hampering production in Germany's manufacturing sector and would continue to do so for the time being. "As a result, only the consumer-related service industries are growing," the institutes said.
Germany's economic recovery would continue to slow down in the coming winter season. "Activity in the service sector will remain below the usual level during the cold season, even with low levels of infection," they noted.
The global economy is expected to recover more quickly. According to the forecast, the economy in the European Union would grow by 4.9 percent in 2021, while GDP in the United States and China would grow by 5.6 percent and 7.8 percent respectively.
German economy would only "reach normal capacity utilization in the course of 2022" with a GDP growth of 4.8 percent. In their previous spring forecast, the institutes only assumed a growth of 3.9 percent for next year.
The economic consequences of the COVID-19 crisis would be gradually overcome with the return to normal capacity utilization. "However, the challenges of climate change and the foreseeable lower economic growth due to a shrinking labor force will reduce consumption opportunities," said IWH vice president Oliver Holtemoeller. Enditem
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