Leading economic institutes lower economic forecast

Leading economic institutes lower economic forecast
Leading economic institutes lower economic forecast

DFrom the perspective of leading economic research institutes, the upturn in Germany this year will be less than initially expected. According to information from the German Press Agency, a new forecast is expected to increase the gross domestic product in Germany by 2.4 percent. The so-called joint diagnosis will be presented on Thursday morning in Berlin.

In the spring, the leading economic institutes had expected that after the corona-related collapse of the economy in 2020, gross domestic product would increase by 3.7 percent this year. In 2020 as a whole, gross domestic product fell by 4.9 percent.

The German economy is currently burdened primarily by supply bottlenecks for raw materials and intermediate products. Several economists and business associations had therefore lowered their forecasts in recent weeks.

The situation is also having a negative impact on the important German exports, which lost momentum in August. For the first time since May 2020, the companies delivered less abroad than in a previous month, as the Federal Statistical Office announced last Friday on the basis of preliminary data. However, exports were still above the pre-crisis level of February 2020.

Problems in global supply chains and high logistics costs

“Rising freight prices and a shortage of containers make international business more difficult and cause prices for all market players to rise,” said the president of the BGA foreign trade association, Dirk Jandura, describing the current situation. At the same time, companies are troubled by the scarcity of raw materials. The industry association BDI had declared: “Problems in global supply chains, high logistics costs and unresolved trade disputes darken the economic sky and have a massive impact on exports as a result.”

Stronger growth expected in 2022

According to dpa information, the leading economic institutes are expecting stronger growth of 4.8 percent for the coming year. In their spring forecast, the institutes assumed an increase of 3.9 percent for 2022.

The so-called joint diagnosis of the institutes is prepared twice a year, in spring and autumn – by the German Institute for Economic Research, the Ifo Institute, the Institute for World Economy, the Leibniz Institute for Economic Research Halle and the RWI – Leibniz Institute for Economic research Essen.

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