Ifo Institute expects only 2.5 percent economic growth

Released on 22.09. 2021

  • Cranes from Hamburger Hafen und Logistik AG (HHLA) and containers are in the port of Hamburg. The ifo Institute has lowered its growth forecast for the German economy. Photo: Georg Wendt

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A strong economic recovery was expected for the summer. But it is still a long time coming. Delivery bottlenecks also cause problems for the manufacturing companies. 2023

Munich (dpa) – The Ifo Institute has lowered its growth forecast for the German economy. This year, economic output should only increase by 2.5 percent – 0.8 percentage points less than previously forecast.

«The strong recovery after Corona, originally expected for the summer, is postponing further », Said Ifo economic chief Timo Wollmershäuser on Wednesday.

2020 Germany’s economic output had slumped by 4.9 percent compared to the previous year. For 2022 the economic researchers increased their growth forecast by 0.8 points to 5.1 percent.

“At the moment, industrial production is shrinking as a result of supply bottlenecks for important preliminary products,” said Wollmershäuser. The global demand for durable consumer goods and electronic items has brought many manufacturers to their capacity limits. In addition, changes in the flow of goods would have posed enormous challenges for global supply chains.

On the other hand, service providers recovered. The increase in employment there accelerated strongly in the second quarter. “The economy is divided,” said Wollmershäuser. The number of unemployed is likely to fall to 2.6 million this year and 2021 to 2.4 million. “Short-time working has also been reduced noticeably and will reach its pre-crisis level in the coming year,” the economic researchers predicted. The inflation rate is likely to rise to 3.0 percent this year, for the coming year the institute expects an inflation rate of 2.3 percent , Municipalities and social security – is likely to reach 52 billion euros this year and in the coming 52 billions. For 2023 the economic researchers expect a balanced state budget.

Other research institutes also had theirs Forecasts recently lowered. The RWI in Essen expects 3.5 percent economic growth this year, the IWH in Halle 2.2 percent and the DIW in Berlin 2.1 percent. The leading research institutes want to present a joint autumn forecast in mid-October.

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