The Ifo institute lowers Germany growth forecast for 2021 to 3.3%, down from March forecast of 3.7%. 2022 GDP growth is now estimated to be 4.3%, upgraded from prior projection of 3.2%. Unemployment rate is expected to drop from 5.9% in 2020 o 5.8% in 2021, and then 5.2% in 2022. CPI is expected to accelerate from 0.5% in 2020 to 2.6% in 2021, but slowed to 1.9% in 2022.
“With falling infection rates and progress in vaccination against Covid-19, the existing economic restrictions should gradually be lifted,” it said. “There are no longer any obstacles to an economic recovery in trade and contact-intensive services by the end of 2021.” However, “in the short term, bottlenecks in the supply of intermediate products will have a dampening effect, so the manufacturing boom is likely to cool somewhat in its further course.”
