Economy
Bundesbank: Economic growth in 2021 weaker than expected
Containers and cranes in the port of Hamburg. Photo: Georg Wendt / dpa
© dpa-infocom GmbH
The export nation Germany picked up speed again surprisingly quickly after the pandemic shock. But the upswing has faced headwinds. The economy is no longer running as smoothly as expected.
According to the Bundesbank, the recovery of the German economy from the Corona low will take longer than had been hoped for in the spring.
Economic output will “probably still fall short of its pre-crisis level of the final quarter of 2019, even in autumn,” writes the Bundesbank in its October monthly report. “In 2021, GDP is likely to grow significantly less than expected in the Bundesbank’s June projection.” In June, the central bank had forecast growth in real gross domestic product (GDP) of 3.7 percent for the current year.
But delivery bottlenecks and material shortages are slowing the upswing in Germany as an export nation. “In the current quarter, the overall economic activity is expected to grow significantly weaker”, write the economists of the Bundesbank in the monthly report. «The strong momentum in the service sector is likely to subside considerably. (…) The manufacturing industry is likely to continue to suffer from the delivery problems. “
In the third quarter, for example, the hospitality industry benefited from the reversal of the corona restrictions. “The German economy continued to recover in the summer of 2021,” affirmed the Bundesbank. “Economic activity is likely to have increased slightly more than in the spring.” The fact that supply bottlenecks for raw materials and intermediate products dampened production in the industry prevented even stronger economic growth in the summer.
After the slump in economic output in the Corona lockdown at the beginning of the year (minus 2.0 percent), GDP had increased by 1.6 percent in the period from April to June 2021 inclusive compared to the previous quarter. The Federal Statistical Office plans to publish the first figures for the third quarter this Friday (October 29th).