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German economic recovery to lose steam as pandemic continues to dominate

German economic recovery to lose steam as pandemic continues to dominate

Germany’s leading economic institutes on Wednesday published their autumn report, which paints a more pessimistic forecast for the recovery of Europe’s largest economy than experts had predicted in their previous spring report.



a group of people sitting at a picnic table: 13 October 2020, Berlin: Unoccupied chairs of various open-air cafes and restaurants in Tauentzienstraße. Missing guests due to corona-related restrictions are causing the restaurateurs some trouble. Photo: Jens Kalaene/dpa-Zentralbild/ZB (Photo by Jens Kalaene/picture alliance via Getty Images)


13 October 2020, Berlin: Unoccupied chairs of various open-air cafes and restaurants in Tauentzienstraße. Missing guests due to corona-related restrictions are causing the restaurateurs some trouble. Photo: Jens Kalaene/dpa-Zentralbild/ZB (Photo by Jens Kalaene/picture alliance via Getty Images)

The research institutes have revised their GDP forecasts downwards by a percentage point for both 2020 and 2021.

They now expect gross domestic product (GDP) to decline by 5.4% this year from the -4.2% they had forecast in Spring. For 2021, they expect growth of 4.7%, revised down from 5.8%. In 2022, economic output should increase by 2.7 %, they said.

“A good part of the slump from the spring has already been made up, but the remaining catching-up process represents the more arduous journey back to normal,” said Stefan Kooths, economic director of IfW Kiel, in a statement.

READ MORE:German government defends curfews and travel bans amid outcry from businesses

Germany, like most other European countries, is suffering from a second wave of infections, with daily tallies rising to numbers not seen since April.

Chancellor Angela Merkel will meet with the leaders of Germany’s 16 states in Berlin on Wednesday in an attempt to reach some kind of clarity on the confusion over different curfews and domestic travel bans between states.

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The report, which comes out twice a year, is developed jointly by the German Institute for Economic Research, the Ifo Institute in Munich, the Kiel Institute for the World Economy, the Halle

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German economic recovery loses momentum – institutes

German economic recovery loses momentum – institutes

BERLIN, Oct 14 (Reuters)Europe’s largest economy will recover more slowly from the coronavirus pandemic than originally predicted, Germany’s leading economic research institutes forecast on Wednesday.

As Reuters previously reported from sources, the institutes expect the economy will shrink by about 5.4% in 2020, a bigger decline than the 4.2% they forecast in April.

The institutes’ forecast, which forms the basis for the government’s own economic predictions, expects a rebound of 4.7% in 2021, also more pessimistic than their April forecast for 5.8% growth. They expect growth of 2.7% in 2022.

The institute said the recovery was being held back by sectors particularly hard hit by social distancing restrictions such as restaurants, tourism, events and air travel.

“Activity in this part of the German economy will … catch up with the rest of the economy only once measures to control the pandemic have largely been dropped, which we do not expect before next summer,” said Stefan Kooths, head of forecasting at the Kiel institute.

(Reporting by Emma Thomasson Editing by Riham Alkousaa)

((+49 30 2888 5081; Reuters Messaging: emma.thomasson.thomsonreuters.com@reuters.net))

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