Germany Slashes 2021 Economic Growth Outlook, Hikes 2022 Forecast

Source: Reuters

Germany has downgraded its economic growth outlook for the year amid the ongoing global supply issues, but the country remains more optimistic for the coming year. EWG is up 0.92%.

• Sources close to the matter said the government slashed its 2021 economic forecast to 2.6%, down from the 3.5% prediction it announced in April.
• It upgraded its 2022 outlook to 4.1% from 3.6% and expects growth to normalize at 1.6% in 2023.
• The revisions come amid the impact of the global supply chain bottlenecks, especially in semiconductors and intermediate goods.
• The hit on production, along with high demand, is pushing price increases upward, with inflation expected at 2.9% this year from 0.6% in 2020.
• The government believes the uptick is temporary and expects inflation to ease to 2.2% next year and 1.7% in 2023.
• The updated growth forecasts are scheduled to be formally announced by Economy Minister Peter Altmaier on Wednesday.