Source: Wall Street
On October 14, the five authoritative German economic research institutions released the autumn joint economic forecast report, which once again lowered the German economic growth forecast for this year.
The report predicts that the German economy will grow by 2.4% this year, 1.3 percentage points lower than the growth forecast released in the spring. The main reason for the downward adjustment is that the COVID-19 epidemic still has an impact on the German economy, and it is difficult to fully normalize close contact and personnel-intensive activities in the short term. In addition, supply bottlenecks are hampering the development of German manufacturing.
Oliver Holtem ö ller, director of macroeconomics at the Harley Institute for Economics, said the US economy rebounded strongly earlier this year, but not as much as expected because of supply bottlenecks in the manufacturing sector.
Germany's industrial output fell 4.1 per cent in August, down 9 per cent from pre-epidemic levels. Several big German carmakers have had to suspend production because of material shortages, especially semiconductors.
However, the five agencies believe that in 2022, the adverse impact of the epidemic and supply bottlenecks on the German economy will gradually be overcome, and capacity utilization is expected to return to normal. Economists raised their forecasts for economic growth next year to 4.8% from 3.9%. At the same time, another 450000 jobs will be added next year and a similar number will be added in 2023, bringing the unemployment rate close to pre-epidemic levels.
At the same time, economists have raised inflation expectations for this year and next, from 2.4 per cent to 3 per cent and from 1.7 per cent to 2.5 per cent, reflecting market expectations that higher energy prices and production costs will put pressure on prices.
However, Oliver Rakau, chief German economist at the Oxford Institute of Economics, said inflation was expected to disappear in Germany and that the recent target of inflation above 2 per cent was only "temporary".
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