How much will Germany’s economy grow in 2021? The German estimates
Germany will grow less than expected: the Ifo has revised its forecasts for 2021 by half a point, from 4.2% estimated in January to 3.7% today
The main German economic research institutes saw downward growth estimates for the current year and for the one to come. Today it was the turn of the Ifo , the prestigious Munich institute, which has revised its forecasts for 2021 by half a point, going from the 4.2% estimated in January to the current 3.7%. “The crisis caused by the pandemic continues over time and thus pushes forward the robust recovery that was expected,” explained Timo Wollmershäuser, head of the economic data of the IFO.
Therefore, the estimates for 2022 have been revised upwards this time: instead of the 2.5% assumed three months ago, German GDP should grow by 3.2%. In monitoring the economic trend, theCovid variable has always been highlighted by experts. Based on the experience of the first wave, which after the spring block had shown a strong and rapid summer recovery, analysts had hypothesized a similar trend in the winter even after the second, trusting moreover on the hoped-for efficiency of the German vaccination campaign. . But the second wave did not end like the first, the pandemic curve settled on a plateau that made it necessary to maintain the social and economic restrictions deemed necessary to contain the infections. And the slow-motion vaccination campaign is effectively exposing the country to the third wave, dominated by the more infectious so-called English variant and managed with further crackdowns on economic and social life. This scenario, although considered less likely in January, was nevertheless indicated by economists as a possible obstacle to the robust recovery in 2021.
A similar trend, with some difference in percentage points, emerged from the forecasts of the Iw in Cologne. For the Rhenish economic institute, GDP growth in 2021 will be even lower, around 3% (in December the estimates were 4%) while it will be more generous in 2022, when it can reach 4%. "At the moment in Germany there is a competition between injections and infections", the Iw experts observe, a competition between the tiring run-up to vaccinations and the exponential increase in the contagion curve in the context of the third wave. If in the next month the tug-of-war reverses in favor of injections (an increase in available doses and a decline in infections following the stricter lockdown on Easter days is expected), it will be possible to maintain current economic forecasts.
The IW calculates the costs of lockdowns for the German economy to date at around 250 billion euros, while the Ifo estimates the general costs of the pandemic crisis at 405 billion in the period between 2020 and 2022.
Uncertainty therefore pervades even these more recent estimates by the institutes. "The forecast depends crucially on the further course of the pandemic", added Wollmershäuser, "if sales in the services sectors directly affected by the pandemic crisis remain at the low level of the first quarter for the following three months, the increase in economic production in 2021 would be 0.3 points lower and would reach 3.4% ”. This would result in a transfer of 0.2% over 2022, bringing next year's GDP growth to the same 3.4% in 2021. With an additional 13 billion in costs due to the pandemic between 2020 and 2022, which would rise to 418 billion euros.
More optimistic is the Ifo's gaze on the job market. The unemployed will drop from 2.70 million in 2020 to 2.65 million in 2021 and 2.44 million in 2022, for a rate that will decrease over the three years considered from 5.9 to 5.8 to 5.3. next year.
Estimates also on the increase in prices, which from 0.5% last year will grow by 2.4% in 2021 and 1.7% in 2022. Also according to the IFO of Monaco, the state deficit will increase from 139, 6 billion euros to 122.9 in this year and should reach 61.2 billion in 2022.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/quanto-crescera-leconomia-della-germania-nel-2021-le-stime-tedesche/ on Wed, 24 Mar 2021 09:34:07 +0000.