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Some of Germany's economic recovery has pushed back in 2022, despite an increase in activity as businesses reopen, the Ifo Instiute said Wednesday in their summer economic forecast, with next year's growth seen stronger as well. "The main factor dampening growth in the short term are the bottlenecks in the supply of intermediate products," explains Timo Wollmershäuser, Head of Forecasts at ifo.
The Ifo institute now expects the German economy to grow by 3.3% in 2021, which is 0.4pp lower than their previous forecast. On the other hand, forecasts for 2022 have been raised by 1.1pp to 4.3%. Ifo Analysts also project German inflation to surge to 2.6% in 2021, due to energy inflation and the renewed increase of VAT, before it is forecast to level off to 1.9% in 2022.
"The costs of the coronavirus crisis for the years 2020 to 2022 amount to EUR 382 billion. Our calculations assume that the German economy would have grown during that time by an average of 1.2 percent per year.", Wollmershäuser added.
Source: Ifo Institute
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.