German government cuts 2022 economic growth forecast to 3.6%

BERLIN – The German authorities on Wednesday reduce its progress forecast for this yr, however mentioned that Europe’s greatest economic system stays “sturdy” and can return to its pre-pandemic dimension in 2022.

The Financial system Ministry predicted that gross home product will develop by 3.6%, down from the 4.1% Germany’s earlier authorities forecast in late October.

The image has been clouded since then by a steep new wave of coronavirus infections fueled by the extremely contagious omicron variant.

GDP grew 2.7% final yr, in line with preliminary official figures, rebounding from a plunge of 4.6% in 2020 when pandemic lockdowns had been at their most extreme. The federal government mentioned this yr’s projected progress will deliver it again to its pre-crisis dimension.

“The implications of the corona pandemic are nonetheless noticeable and plenty of firms nonetheless must battle with them,” Financial system Minister Robert Habeck mentioned in an announcement. “However, our economic system remains to be sturdy.”

Advert

Germany’s nationwide statistics workplace has estimated that output in Germany fell by between 0.5% and 1% in final yr’s closing quarter. Forecasts are additionally shaky for the present quarter, elevating the potential of a technical recession.

However hopes are excessive that the image will enhance because the yr progresses. On Tuesday, a carefully watched survey confirmed enterprise confidence unexpectedly selecting up in January after a six-month slide.

That improve got here due to a major enchancment in managers’ outlook for the following six months, whilst their evaluation of the present state of affairs worsened.