The economy will not recover until 2022: Researchers lower the forecast for 2021 significantly

The hoped-for catch-up effect after the Corona crisis is apparently still a long time coming: The leading economic research institutes are correcting their growth forecast significantly downwards. The problems in the supply chains are also to blame. The recovery is only supposed to be postponed.

The leading economic research institutes have once again significantly lowered their forecast for the growth of the German economy this year. In their autumn report, the experts are now assuming an increase in gross domestic product (GDP) of 2.4 percent this year – after a forecast of 3.7 percent in the spring. The economic situation was still burdened by the Corona crisis, and there were also delivery bottlenecks, it was said to justify.

According to the joint forecast of the institutes, the crisis will gradually be overcome. “However, supply bottlenecks for intermediate products in the manufacturing industry are hindering production, so that only the consumer-related service sectors are growing.” In addition, due to the ongoing corona pandemic, a complete normalization of “contact-intensive activities is not to be expected in the short term”. Therefore, the German economy is unlikely to “reach normal capacity utilization” again in the course of 2022, the researchers forecast.

For 2022 they expect economic growth of a substantial 4.8 percent. In the spring they were still assuming an increase of 3.9 percent in the coming year – so the recovery is postponing. The Leibniz Institute for Economic Research in Essen (RWI), the Leibniz Institute in Halle (IWH), the German Institute for Economic Research (DIW), the Munich Ifo Institute and the Institute for the World Economy (IfW) are involved in the joint report Kiel involved.