Economic institutes slash Germany’s growth forecast

Oct 14, 2021, 1:55 AM | Updated: 2:09 am
FILE - In this July 4, 2021 file photo, the European Central Bank, right, is seen as clouds drift o...

FILE - In this July 4, 2021 file photo, the European Central Bank, right, is seen as clouds drift over Frankfurt, Germany. Germany's leading economic institutes has downgraded their forecast for Europe's biggest economy saying it is still shaped by the impact of the coronavirus pandemic and that global supply bottlenecks also hamper the country's recovery. (AP Photo/Michael Probst, File)

(AP Photo/Michael Probst, File)

BERLIN (AP) — Germany’s leading economic institutes on Thursday slashed their forecast for Europe’s biggest economy, saying output is being held back by global supply bottlenecks and lingering restraints on personal contact amid the pandemic.

The experts cut their growth forecast for this year to 2.4% from the 3.7% they had forecast earlier this year.

They said, however, that during the course of 2022 the economy should return to normal capacity utilization as the adverse effects of the pandemic and supply bottlenecks are gradually overcome. They raised the 2022 growth forecast to 4.8% from 3.9% in 2022.

Germany’s manufacturing and export-heavy economy has been hit by shortages of a range of parts and raw materials as global supply chains struggle to cope with the rebound in demand post-pandemics, as well as by higher input prices.

That has led to talk of a “supply chain recession.” In particular, the auto industry has suffered from lack of semiconductor components for the many electronic functions in today’s automobiles, forcing them to cut back production. Unusually high natural gas prices have forced big chemical firms to cut back production of ammonia, a key ingredient in fertilizer.

Additionally, the report said that “a normalization of contact-intensive activities cannot be expected” in the current year. Service, sports and entertainment businesses have suffered large losses from the pandemic and still face some public reluctance as well as capacity limits and vaccination requirements for entry.

At the same time, consumers are expected to face higher inflation than has been usual in recent years. The institutes expect consumer prices to rise by 3% in the current year and by 2.5 % in 2022, while the public budget deficit is expected to fall from 4.9% in relation to gross domestic product in the current year to 2.1% in the following year.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Medics wearing special suits to protect against coronavirus make a briefing as they come to treat a...
Associated Press

WHO: Europe the only region with rise in COVID-19 last week

LONDON (AP) — The World Health Organization said there was a 7% rise in new coronavirus cases across Europe last week, the only region in the world where cases increased. In its weekly assessment of the pandemic released late Tuesday, the U.N. health agency said there were about 2.7 million new COVID-19 cases and more […]
3 hours ago
Associated Press

Across Africa, major churches strongly oppose LGBTQ rights

In Ghana, home to a diverse array of religions, leaders of major churches have united in denouncing homosexuality as a “perversion” and endorsing legislation that would, if enacted, impose some of the harshest anti-LGBTQ policies in Africa. In Nigeria, the umbrella body for Christian churches depicts same-sex relationships as an evil meriting the lengthy prison […]
3 hours ago
Associated Press

Credit Suisse faces penalties over Mozambique loan deals

ZURICH (AP) — Credit Suisse has announced settlements with British, Swiss and U.S. authorities in connection with loans provided to state companies in Mozambique, with the Swiss financial markets authority setting new restrictions on the top-drawer bank and saying it “seriously violated” anti-money-laundering requirements in the case. The Zurich-based bank said it expects to take […]
3 hours ago
Associated Press

Germany detains 2 ex-soldiers trying to form mercenary group

BERLIN (AP) — German authorities on Wednesday detained two former soldiers who are alleged to have tried to form a mercenary group that would have intervened in the military conflict in Yemen. Federal prosecutors said the men, identified only as Arend-Adolf G. and Achim A. in keeping with Germany privacy laws, were detained in southern […]
3 hours ago
FILE - In this Tuesday, Dec. 8, 2020 file photo, people wade their way through water in flooded St....
Associated Press

Flooding in Venice worsens off-season amid climate change

VENICE, Italy (AP) — After Venice suffered the second-worst flood in its history in November 2019, it was inundated with four more exceptional tides within six weeks, shocking Venetians and triggering fears about the worsening impact of climate change. The repeated invasion of brackish lagoon water into St. Mark’s Basilica this summer is a quiet […]
3 hours ago
Volunteers hold the Olympic torch and the frame on stage during a welcome ceremony for the Frame of...
Associated Press

Olympic flame arrives in Beijing amid boycott calls

BEIJING (AP) — The Olympic flame arrived in Beijing on Wednesday amid calls from overseas critics for a boycott of the Feb. 4-20 Winter Games. Beijing’s Communist Party Secretary Cai Qi, the top official in the Chinese capital, received the flame at a closely-guarded airport ceremony. Beijing successfully hosted the Summer Olympics in 2008, although […]
1 day ago

Sponsored Articles

...
Schwartz Laser Eye Center

How to sharpen your vision with elective procedures

Imagine opening your eyes in the morning and being able to see clearly. You wouldn’t have to wait to put on glasses or contacts, and there would be no more blurry showers nor forgetting where your glasses are.
...
Chris Kennedy

My Special Aflac Duck® taking flight in Arizona

For more than 65 years, Aflac has had the extraordinary opportunity and privilege to help provide peace of mind to individuals who have our supplemental insurance policies.
...
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
Economic institutes slash Germany’s growth forecast