A strong economic recovery was expected for the summer. But it is still a long time coming. Supply bottlenecks are also a problem for manufacturing companies.
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, which was originally expected for the summer, continues to be postponed,” said Ifo economic chief Timo Wollmershäuser on Wednesday.
In 2020, Germany’s economic output 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 presented the global supply chains with enormous challenges.
On the other hand, the 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 expected to fall to 2.6 million this year and 2.4 million in 2022. “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.
The national deficit – the new debt of the federal government, states, municipalities and social security funds – is likely to reach 157 billion euros this year and 52 billion in the next. For 2023, the economic researchers expect a balanced state budget.
Other research institutes had recently lowered their forecasts. 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.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
