Exclusive-German economic institutes slash 2021 growth forecast to 2.4% -sources

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FILE PHOTO: General view of empty streets in a business district near the central train station Hauptbahnhof, amid the coronavirus disease (COVID-19) pandemic, during the lockdown in Berlin, Germany January 20, 2021. REUTERS/Fabrizio Bensch
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BERLIN (Businesshala) – Germany’s economic institute is slashing its 2021 growth forecast for Europe’s largest economy from 3.7% to 2.4% as supply bottlenecks slowed the recovery, two people familiar with the decision said. told Businesshala on Wednesday.

Four institutions – RWI in Essen, DIW in Berlin, IFO in Munich and Halle’s IWH – are expected to release their combined forecasts on Thursday.

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Both said they would raise their forecast for growth next year from 3.9% to 4.8%, and forecast economic growth to 1.9% for 2023.

On Tuesday, the International Monetary Fund cut its 2021 growth forecast for Germany by half a percentage point from its July forecast to 3.1%.

Germany’s GDP fell 4.6% last year due to the coronavirus pandemic.

Data from the Office of Statistics showed last week that export volumes fell in August for the first time in 15 months, slipping unexpectedly as supply chain issues were chopping up the global economy.

The German government, which has so far forecast growth of 3.5% for this year and 3.6% for the next, is expected to update its estimates this month as well.

Official data on economic growth for the third quarter is due on October 29.

Reporting by René Wagner; Written by Riham Alkausa and Miranda Murray; Editing by Maria Sheehan and John Stonestreet

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