Germany's economic advisers cut 2021 growth forecast
The German government’s panel of independent economic advisers has cut its 2021 growth prediction for Europe’s biggest economy to 2.7%
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The German government's panel of independent economic advisers on Wednesday cut its 2021 growth prediction for Europe s biggest economy to 2.7%, the latest in a series of downgrades by forecasters.
The panel's new forecast was down from the 3.1% it predicted in March. It expected gross domestic product would expand by 4.6% in 2022, with the economy likely to return to its pre-pandemic size in next year’s first quarter.
Germany’s recovery from the coronavirus pandemic is progressing more slowly than originally anticipated amid concerns about higher energy prices and stubborn bottlenecks in supplies of raw materials and parts.
“We think the economic recovery remains intact,” panel member Volker Wieland said. “It is delayed somewhat until the bottlenecks disperse bit by bit.”
A resurgence of COVID-19 infections also is causing alarm, though German authorities want to avoid blanket lockdowns of the kind imposed during earlier surges.
“There is great uncertainty about how the economy will perform going forward,” the economic advisers said. “Renewed health policy restrictions or longer-lasting supply shortages could take a heavy toll on the recovery.”
They said, however, that inflation could drop again next year following an acceleration over recent months.
Official figures show that Germany s GDP grew by 1.8% in the July-September period compared with the previous quarter. That followed growth of 1.9% in the second quarter and a 1.9% decline in the first quarter. Factory orders and export figures for September, the most recent month available, were disappointing.
The German government also recently cut its full-year growth forecast to 2.6% from the 3.5% it had predicted in April. Last year, GDP shrank by 4.9%.