The Ifo Institute is lowering its growth forecast for this year, but it should be even better next year. Although people spend a lot of money, the industry suffers from delivery bottlenecks.
According to the Ifo Institute, the German economy will recover from Corona more slowly than initially thought. Economics researchers now only envision growth of 2.5% this year, 0.8 percentage point lower than expected. At the same time, they increased their forecast for the coming year by 0.8 percentage point, as the institute announced on Wednesday. After that, Germany’s economic output is even expected to increase by 5.1%.
“The strong recovery after Corona, which was initially expected for the summer, continues to be postponed,” Ifo economic chief Timo Wollmershäuser said, according to a statement. He spoke of a divided development: The industry can currently produce less because there are delivery bottlenecks for large preliminary products. At the same time, however, the activity of service companies is growing.
“The sudden surge in global demand for consumer durables, electronics and specialty medical products has pushed many manufacturers of industrial intermediates to their capacity limits,” said Wollmershäuser. “In addition, global supply chains have faced enormous logistical challenges due to dramatically altered flow of goods. At the same time, individuals are spending more money – because the prospects for income and employment are good.
Ifo experts assume that the number of unemployed in Germany will decline continuously: from 2.6 million this year to 2.4 next year to 2.3 million in 2023. The currently relatively high inflation rate will also decline – from 3.0% this year to 1.6% the next. Then, the state budget should also be balanced again, according to forecasts by the Ifo Institute. This year, however, federal, state, local and social security funds are expected to have a deficit of just under 160 billion euros and next year a good 50 billion euros.