Germany Lowered Its 2021 Growth Forecast

Germany lowered its 2021 growth forecast. The government lowered its growth forecast for 2021 to 3 percent.

German Minister of Economy and Energy Peter Altmaier held a press conference in Berlin for the economic growth report published by the German government. Stating that the official growth expectation for 2021, announced as 4.4 percent in October 2020, was reduced to 3 percent, Altmaier said that the German economy is expected to return to the pre-crisis level in the second half of 2022. Altmaier said, “Now is not the time to speak openly about restrictions easing against Covid-19.” And underlined that restrictions should be adhered to in the coming weeks in order to achieve success in the epidemic. Stating that the recovery in the German economy will continue in 2021, albeit with less momentum, Altmaier said, “The situation in the Covid-19 epidemic is still serious. The danger of new types of the virus continues. Therefore, we cannot rush to risk what we have achieved.” In the report, it was estimated that the country's exports and imports will increase by 6.4 percent this year and 7.2 percent, despite the second wave of the coronavirus epidemic and the slow course of vaccination efforts. The unemployment rate is expected to be 5.8 percent this year, while employment is expected to remain at 44.8 million. The German economy shrank by 5 percent in 2020 due to the health and economic crisis caused by Covid-19 and ended its uninterrupted growth for 10 years. On January 19, the measures taken on January 5 in the fight against the Covid-19 outbreak in Germany and valid until January 31 were extended until February 14. Economists predict that economic activities in the country will stagnate in the first quarter of the year, even if the tightened measures do not directly affect the manufacturing and construction sector.       Source: AA