BERLIN- Persistent supply bottlenecks and a fourth wave of coronavirus infections in Germany are further delaying the recovery of Europe’s largest economy from the pandemic, the Ifo institute said on Tuesday as it slashed its growth forecast for next year.
The Ifo institute expects the German economy to shrink by 0.5 percent quarter-on-quarter in the final three months of this year and to stagnate in the first three months of next year.
Coupled with the current surge in overall prices, Germany is now facing several winter months of zero growth and unusually high inflation, a combination described by economists as stagflation.
For 2022 as a whole, Ifo slashed its economic growth forecast to 3.7 percent from 5.1 percent projected in September, and also confirmed its already reduced forecast of 2.5 percent for this year. For 2023 it lifted its growth forecast to 2.9 percent from 1.5 percent.
“The strong recovery initially expected for 2022 will be further pushed back,” Ifo chief economist Timo Wollmershaeuser said.
The bleak outlook was shared by the economy ministry, which on Tuesday said in its monthly report that the government expected to see “rather weak” economic output in the final quarter of the year. – Reuters
