Ifo institute cuts Germany 2021 GDP growth forecast to 2.5% from 3.3% previously

Ifo reveals their latest projections on the German economy

  • Lifts 2022 GDP growth forecast to 5.1% from 4.4% previously

The think tank attributes the downgrade this year to supply chain disruptions for the most part, slowing down the recovery from the pandemic. Adding that:

“The strong recovery from the coronavirus crisis, originally expected for the summer, is further postponed. Industrial production is currently shrinking as a result of supply bottlenecks for important intermediate goods. At the same time, service providers are recovering strongly from the coronavirus crisis. The biggest risks causing uncertainty for the outlook are the increased number of coronavirus infections and significant delivery and production bottlenecks which are particularly affecting German industry.”

It needs to be said that the upgrade to 2022 may also be called into question in the months ahead if global supply chain disruptions continue to persist to year-end, which it will.
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