BERLIN (Pakistan Point News / Sputnik - 16th June, 2021) The German economy is expected to grow slower than previously expected due to a dampening effect of bottlenecks in supply chains, the IFO economic research institute said Wednesday.
"Overall, gross domestic product is expected to grow by 3.3 percent in 2021 and 4.3 percent in 2022," a press statement read.
Economy Minister Peter Altmaier said in June that the EU's largest economy was expected to grow between 3.4% and 3.7% this year.
IFO said that, although industrial output had improved significantly over the first three months of 2021, supply bottlenecks for key intermediate products had likely impeded a stronger expansion of production.
A sharp rise in global energy prices and an increase in value-added tax caused the inflation rate to accelerate, reaching 2.5% in May, the highest level since 2008. Consumer prices are likely to rise 2.6% in 2021
Trade also suffered losses as sales were hit hard by lockdown measures affecting the retail sector. Export is expected to recuperate, rising 10.4% versus 9.4% last year, while import will grow 11.4% versus 8.4%.
