Because the German economy will not gallop
Fourth wave and more: the Ifo lowers forecasts for Germany's GDP growth in 2022. The article by Pierluigi Mennitti
Moving the shot further. It could be the title of the series of estimates on the German economy that the Ifo has been publishing periodically since the start of the pandemic. Those baked on Tuesday lower the previous estimates, as has been the case for a few months now. After the confirmed + 2.5% this year, Germany's GDP will "only" grow by 3.7% in 2022, a cut of almost one and a half points compared to the + 5.1% forecast in the previous September report. .
Thus the more robust recovery after the 2020 crisis moves forward, marked by the moment of greatest impact on the Covid economy, with full and prolonged lockdowns, the suspension of many industrial activities, the almost complete blockade of services. 2022 should have been the year of the decisive turning point, it will instead be 2023, provided that the pandemic is really contained.
The fourth pandemic wave is the additional element to the problems that had already faced in previous months, such as slowdowns and blockages in supply chains and the leap forward in energy costs. The vaccination campaign that started with good momentum had made us imagine that the emergencies related to Covid would be put behind us. But the campaign ran aground with the summer and in early autumn Germany found itself with one of the lowest immunization rates in European countries. With very strong regional inequalities: in the eastern Land the share was found to be below 60%, a segment of the population discovered too large to be able to manage the expected return of autumn infections.
Thus, although at the federal level the government has been slow to take decisions, with the result of aggravating the situation even more and of finding themselves with peaks of infections never recorded and intensive care under stress (thanks also to the non-replaced flight of assistance staff in previous months), individual regions and municipalities had to locally re-establish restrictions that affected above all trade and the usual sensitive sectors: catering and tourism.
The appearance of the omicron variant throws further uncertainty for the next few months and IFO analysts now doubt that the pandemic can be overcome before next summer. This throws further uncertainty in the German economy, as already said, weakened by other negative factors that were not foreseen a year ago and that affect or slow down the recovery a little throughout Europe.
"The bottlenecks in international supply chains are the other factor that is slowing down the German economy considerably", confirmed the economic director of Ifo, Timo Wollmershäuser, in the press conference presenting the data, "and the strong recovery initially planned for 2022 it will be further postponed ".
According to estimates by the Bavarian institute, German GDP is expected to grow by 2.9% in 2023, almost double what was expected in September. In the current quarter, the gross domestic product should decline by 0.5% compared to the previous quarter and stagnate at the beginning of 2022. From the spring onwards, however, the forecasts are tinged with pink: "In the summer of 2022, with the ebb of the pandemic and the gradual end of supply bottlenecks, a strong recovery will begin, ”continued Wollmershäuser. The increase in GDP is therefore likely to accelerate significantly with growth rates of 2.3% in the second and 1.8% in the third quarter of 2022.
But they are now forecasts that indicate a trend, perhaps a hope, and which, like the previous ones, will need to be confirmed by facts that at the moment are too uncertain.
Finally, the inflation chapter. Unlike what experts at most other institutions have so far thought, the Ifo expects inflation to continue to rise in the next year: it is currently at 5.2%, the highest level in nearly 30 years. As a result, the inflation rate is likely to increase from 3.1% this year to 3.3% in 2022.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/germania-previsioni-pil-2022/ on Tue, 14 Dec 2021 11:14:35 +0000.