Photo: Uwe Anspach / dpa
The upturn in the German economy this year is likely to be weaker than hoped.
The Federation of German Industries (BDI) has lowered its economic forecast for the current year to three percent in real terms.
The association had previously expected an increase of 3.5 percent.
The association plans to publish its new forecast at the beginning of next week.
Despite strong growth in the second quarter, the economic recovery in 2021 will be somewhat less strong than last forecast in June, said BDI Managing Director Joachim Lang.
The main reason for the revised forecast: weaker private consumption.
The economic and income expectations of consumers were much better in August than a year ago.
However, consumers apparently shied away from making major purchases.
Higher prices, a mask requirement and distance rules in the shops are likely to have impaired the desire to buy, according to the BDI.
"Not really gaining momentum"
The association is also concerned about industrial production: it "did not really get going in the first half of the year" and in the second quarter it even fell by 1.2 percent compared to the previous quarter, according to Lang.
The reason for this is clearly the material bottleneck, because the order books continued to fill up.
However, the BDI expects strong growth in the export of goods and services and in investments in machinery and equipment.
Trade with the EU partner countries and the USA is going brilliantly.
Business in China, on the other hand, is weakening a little.
The increase in exports is "not an automatic mechanism for a long-term economic boom".
Problems in global supply chains, high logistics costs and unresolved trade disputes "darken the economic sky," warns Lang.