The main economic research institutes in Germany have lowered their joint growth forecast for the German economy for 2021.
According to the institutes, the largest economy in Europe will grow by 3.7 percent this year, while it was previously expected to be a plus of 4.7 percent.
It points to the ongoing lockdown measures against the coronavirus in Germany and delays in vaccinations. The half-yearly forecast of the institutes DIW, Ifo, IfW, IWH and RWI is submitted to the German Ministry of Economic Affairs.
Germany’s economy is expected to contract by 1.8 percent in the first quarter due to restrictions against the pandemic.
Later this year, growth should pick up again due to the relaxation of the corona measures and the vaccination campaign against the virus. The services sector in particular, including the hotel and catering industry and retail trade, should benefit from this.
For the time being, the German government has a forecast for growth of 3 percent this year. Last year, the German economy shrank by nearly 5 percent as a result of the pandemic.