Germany’s top economic institutes upgraded economic growth projection for 2022 but lowered its projection for the current year citing supply bottlenecks in the manufacturing sector.
According to the economic forecast Autumn 2021, jointly prepared by the Ifo in Munich, the RWI in Essen, the DIW in Berlin, the IfW in Kiel and Halle’s IWH, gross domestic product will grow 2.4 percent this year instead of 3.7 percent estimated in April.
The projection for 2022 was revised up to 4.8 percent from 3.9 percent. For 2023, growth is seen at 1.9 percent.
Private consumption is likely to return to normal over the course of the coming year. Manufacturing output will also increase again as supply bottlenecks ease, the institutes noted.
As the recovery continues, employment will continue to rise. The unemployment rate is expected to fall to 5.7 percent this year and 5.3 percent next year.
Inflation is projected to remain elevated for the time being. The institutes forecast consumer prices to rise by 2.5 percent in 2022 and 1.7 percent in 2023, after 3 percent in the current year.
Elsewhere, the economy ministry said the economic development is likely to run sideways in the fourth quarter. The ministry expects industrial output to remain subdued in the months ahead.
Although the outlook for industrial activity deteriorated somewhat, the ministry said it remains cautiously optimistic.