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.
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