The year 2021 felt like a disappointment for some Germans. Contrary to what was hoped, the pandemic did not disappear from everyday life. Restrictions on restaurants and other service providers make many believe that there is still a big economic end to come. You can be met with optimism: Most companies are doing good business again, jobs are now secure – and this year it should be even better.
Official statisticians reported on Friday that the German economy grew by almost three percent last year. This is no small matter: Economic output has only increased so strongly a few times since reunification. Germany is recovering from the Corona crisis. Of course, not everything went as planned. Organizers, hotels and others were restricted. In addition, supply bottlenecks slowed down the industry. The good news is that these disruptive factors will most likely disappear by 2022.
You can already see that. Shops and restaurateurs are open differently than a year ago. Even if economists are rightly cautious: the influence of the pandemic on the economy will probably continue to decrease. The industry will work through its huge orders once the supply problems abate as expected. And skeptics overlook the fact that sectors such as construction or information and communication are doing more than before Corona.
The previous government’s crisis management worked
The employees notice that the short-time work plan has worked. This was expensive, but got the jobs. The previous government’s crisis management worked. Does anyone remember the warnings that short-time work benefits are fattening zombie companies and that a wave of bankruptcies will soon sweep across the country? This has turned out to be a myth of market liberals who condemn all crisis policies. If the government had listened to them, Germany would be worse off.
As it is, economic output is likely to rise to the level it was before the pandemic over the course of the year. A fundamentally pessimistic nation should be told: This is no small success after the second worst economic crisis since 1945. Most citizens still have their jobs. Millions of them saved money when they couldn’t go out. They will spend part of it and thus stimulate the economy.
Of course there are always risks. The Russian aggression against Ukraine also threatens an economic setback, just like the surprising corona developments or the numerous conflicts over the second largest economic power, China. In a world situation that has become confusing, the next danger lurks around every corner. But all these risks have to not become reality.
Many Germans are particularly worried that high inflation will reduce their purchasing power. It can be said that several corona effects will disappear this year, so that inflation could decrease. The most dangerous thing would be when people start to believe that prices are going to shoot up forever – and demand big wage increases. That is why the European Central Bank is called upon: It must articulate more clearly than before that it will stop inflation by raising interest rates if necessary. Even if that makes it difficult for countries like Italy to finance their debt.