BERLIN, March 24 (Xinhua) — Germany’s ifo Institute on Wednesday significantly lowered its forecast for the country’s economy, expecting the gross domestic product (GDP) to grow by 3.7 percent in 2021.
“The coronavirus crisis is dragging on, and this is pushing back the expected strong upswing,” said Timo Wollmershaeuser, head of Forecasts at ifo Institute.
The German Economic Institute (IW) also lowered its economic forecast. It projected that the German GDP to grow by three percent this year, noting that pre-crisis levels would not be reached until early 2022.
There was a “growing disparity” in the German economy, IW noted. While the service sector was still largely at a standstill, the country’s industry was gradually catching up to pre-crisis levels as German exports to China and the United States in particular were rising again.
IW forecast the global economy to grow by five percent in 2021.
The Macroeconomic Policy Institute (IMK) was more optimistic, projecting German GDP to grow by 4.9 percent in 2021. Despite the extended COVID-19 lockdown and the slow start of the vaccination program, the German economy would “recover strongly this year and next.”
The development of Germany’s foreign trade would be a driving economic force behind the growth this year as the global economy recovery was expected to pick up noticeably over the course of the year.
Growth was “driven primarily by China’s robust economic momentum and the massive fiscal aid program of the new U.S. administration,” IMK noted. Enditem