The German government raised its growth projection for next year but lowered its forecast for the current year as the supply bottlenecks continued to weigh on industrial activity.
Gross domestic product is expected to climb 4.1 percent in 2022 instead of 3.6 percent estimated previously, the economy ministry said in its Autumn Forecast, released Wednesday.
However, the projection for 2021 was lowered to 2.6 percent from 3.5 percent citing supply bottlenecks and high energy prices. Growth of 1.6 percent is expected in 2023.
Economy Minister Peter Altmaier said the autumn projection shows that Germany is back on the growth path after the Corona crisis. The federal government’s extensive aid package has stabilized the economy and the labor market during the crisis, said Altmaier.
The manufacturing sector is suffering from a historically unique shortage of intermediate goods. This has slowed the industrial economy, especially in the third and fourth quarters of 2021.
The minister expects significant catch-up effects next year if the delivery bottlenecks gradually resolve as the demand for German products remains high.
The government has raised its inflation forecast for the current year to 3 percent from the prior forecast of 2.3 percent. Likewise, the projection for 2022 was lifted to 2.2 percent from 1.4 percent. Inflation is seen at 1.7 percent in 2023.