The German economy is becoming the plaything of the pandemic. First the service sector suffered, then came the recovery and raw materials became scarce. The roller coaster could continue into spring.
According to economists at leading German financial institutions, the approaching winter is causing the economy in Germany to shiver.
“The German economy will have to dress warmly in the coming months,” said Katharina Utermöhl from the Allianz Group in a survey by the dpa. “We expect the autumn cooling to continue,” she said. However, there will be no winter crash like last year. Weaker demand from China exacerbated the problem.
Marc Schattenberg from Deutsche Bank Research also sees no rapid recovery, primarily because of the high energy prices and global delivery bottlenecks, for example for microchips. “No significant relaxation is expected before the end of spring 2022.”
And the chief economist of the state banking group KfW, Fritzi Köhler-Geib adds: “The further recovery will be tougher than expected in the spring.” So far it is difficult to predict how long the material shortages and production disruptions will last on the world markets. The resulting delivery difficulties and strong price increases, for example for important raw materials, delayed the growth out of the crisis.
Lower growth
“The dismantling of the delivery bottlenecks will not be accomplished so quickly because of the sometimes highly complex technical requirements,” said Deutsche Bank expert Marc Schattenberg. He is now only assuming growth of 2.5 percent this year. The economic recovery will shift into next year. Then there should be growth of 4.5 percent according to his forecast. “Postponed is not canceled,” said Koehler-Geib. “Because of the need to catch up after the production downtime caused by the crisis, the order books in the industry are full.”
Economists see a slowed recovery on the labor market compared to the rapid development in the summer months. “The recovery of the German labor market is likely to continue over the winter months, but it will clearly lose momentum,” said Katharina Utermöhl. Nonetheless, unemployment is likely to return to pre-crisis levels by the end of 2022. Utermöhl and Schattenberg assume a reduction in the number of unemployed by around 60,000 in October. The Nuremberg Federal Employment Agency announces its monthly statistics for October on Thursday (October 28th).
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.
