Economists: Recovery of the German Economy is Slowing Down
The recovery of the German economy after the severe blow in the spring is slowing down. This is foreseen by five important economic institutes from Germany, which are coming up with an estimate for economic growth on behalf of the government.
The recovery of the hardest-hit sectors, such as tourism and aviation, in particular, is taking longer now that contamination numbers are rising again.
The think tanks for this year are assuming an economic contraction of 5.4 percent, followed by an increase in the gross domestic product (GDP) of 4.7 percent in 2021.
The German economy will not return to the level until the end of 2022 from before the global virus outbreak. This spring, the researchers assumed an economic contraction of 4.2 percent this year and 5.8 percent growth next year.
In addition to the limitations of social contacts, which are affecting the hospitality and events industry, the revival of the coronavirus is also creating uncertainty for entrepreneurs.
They are therefore more cautious about investment, which hinders the recovery of the largest economy in the eurozone. Another factor in this is that the capital position of many companies has already deteriorated because they generated much less turnover for a while.
The economic estimates, which are published twice a year, come from the Institut für Wirtschaftsforschung in Berlin, Ifo from Munich, the Institut für Weltwirtschaft from Kiel, the Leibniz-Institut für Wirtschaftsforschung from Halle and RWI from Essen.