OECD believes that the German economy can make a strong recovery

Despite delivery bottlenecks and the fourth corona wave, the industrial nations organization OECD believes that the German economy can make a strong recovery. In the coming year, the gross domestic product (GDP) is expected to increase by 3.9 percent, as the Organization for Economic Development and Cooperation (OECD) announced. The federal government is anticipating a somewhat stronger plus of 4.1 percent, and the economy even with 4.6 percent. "We are cautiously optimistic," said OECD economist Isabell Koske. "But there are enormous uncertainties and risks - from the Corona crisis to delivery bottlenecks to inflation." For 2023, the OECD predicts an increase of 2.2 percent. For the year that is coming to an end, growth of 2.8 percent is expected. "The recovery is being hampered by bottlenecks in key inputs in manufacturing," said the OECD. However, given the record order backlog, there could be a strong recovery if the shortage subsides again. Private consumption should also increase noticeably in the next year. The low interest rates and the increasing pressure on capacity are encouraging companies to invest heavily. The price hike is likely to ease in 2022, but remain at an elevated level. "The inflation trend remains a risk," said Koske. "The gas reserves in Europe are at a very low level. Depending on the course of the winter, there may be further price increases here." The delivery bottlenecks could also last longer than expected. "That could also have an impact on prices," said the expert. At 5.2 percent, the inflation rate in Germany is currently at its highest level in almost 30 years.