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Bundesbank: upswing is shifting somewhat backwards

2021-12-17T08:17:32.160Z


Bundesbank: upswing is shifting somewhat backwards Created: 12/17/2021, 09:04 AM Construction cranes at a construction site in Berlin: The central bank expects significantly weaker growth this year and next. © Christoph Soeder / dpa Delivery bottlenecks and the corona pandemic are affecting the German economy. The Deutsche Bundesbank is screwing its economic forecast downwards. Frankfurt / Mai


Bundesbank: upswing is shifting somewhat backwards

Created: 12/17/2021, 09:04 AM

Construction cranes at a construction site in Berlin: The central bank expects significantly weaker growth this year and next.

© Christoph Soeder / dpa

Delivery bottlenecks and the corona pandemic are affecting the German economy.

The Deutsche Bundesbank is screwing its economic forecast downwards.

Frankfurt / Main - According to the Bundesbank, the German economy will suffer a setback in winter.

The corona pandemic and delivery bottlenecks are likely to slow growth in the winter half-year.

“The upswing is delayed somewhat,” explained the outgoing Bundesbank President Jens Weidmann.

The central bank expects significantly weaker growth this year and next, and higher inflation than assumed in June.

In the current year, the Bundesbank economists expect real GDP growth of 2.5 percent.

In June they were still assuming an increase of 3.7 percent.

For 2022, an increase in economic output in Europe's largest economy of 4.2 percent is expected (June forecast: 5.2 percent) and of 3.2 percent (1.7 percent) in the following year.

The central bank is thus more optimistic for 2022 than many economic research institutes, which are expecting growth of less than 4 percent.

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The Bundesbank economists assume that private consumption will pick up significantly from spring 2022.

“For a while, consumers will spend more of their disposable income than they did before the pandemic,” Weidmann explained.

In addition, the delivery bottlenecks should resolve by the end of 2022, which should temporarily give exports a strong boost.

For this year, the Bundesbank expects an inflation rate of 3.2 percent based on the harmonized consumer price index, which the European Central Bank (ECB) uses for its monetary policy in the euro area (June forecast: 2.6 percent).

In the coming year, the rate should rise to an average of 3.6 percent (1.8 percent), although special effects such as the withdrawal of the temporary VAT reduction will then no longer apply.

The Bundesbank referred to the sharp rise in raw material prices for energy on the international markets.

In addition, companies would pass higher costs on to consumers due to supply bottlenecks and expand profit margins when demand is strong.

According to the Bundesbank, the inflation rate will fall again in 2023.

At 2.2 percent, however, it will remain comparatively high in 2023 and 2024.

The reasons for this are clearly rising wages, the good economic situation, but also the costs caused by the conversion to a climate-neutral economy.

"As in the euro area as a whole, the upside risks predominate for the inflation rate," said the Bundesbank President.

"Monetary policy should not ignore these risks and should remain vigilant." Dpa

Source: merkur

All news articles on 2021-12-17

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