BERLIN (Pakistan Point News / Sputnik - 14th October, 2021) German economic institutes have downgraded the country's GDP growth forecast for 2021 due to the prolonged crisis caused by the COVID-19 pandemic and expect a 2.4% growth instead of the previously projected 3.7%, the Munich-based IFO research institute said on Thursday.
"The economic situation in Germany continues to be marked by the coronavirus pandemic. A complete return to normal in contact-intensive activities is not expected in the short term ... In the course of 2022, the German economy should return to normal capacity utilization. According to the institutes' forecast, gross domestic product will increase by 2.4 percent in 2021," the institute said in a statement.
Meanwhile, IFO has increased its forecast for the 2022 economic growth to 4.8% compared to the previously expected 3.9%.
"Consumer price inflation, currently well above the long-term average, is expected to remain elevated for the time being ... The institutes expect consumer prices to rise by 2.5 percent in 2022 and by 1.7 percent in 2023, after 3 percent in the current year," the statement read.
A downward trend is also seen in the forecast for the public debt ratio, which is likely to decline from 71% in 2021 to 67.3% in 2022 and 64.9% in 2023, the institute added.
