IfW Kiel Raises German GDP Growth Forecast To 3.9 Pct In 2021

Germany's economy is headed for a "self-sustained recovery," the Kiel Institute for the World Economy (IfW Kiel) said on Thursday, predicting that the country's gross domestic product (GDP) would rise by 3.9 percent in 2021

BERLIN, (UrduPoint / Pakistan Point News - 18th Jun, 2021 ) :Germany's economy is headed for a "self-sustained recovery," the Kiel Institute for the World Economy (IfW Kiel) said on Thursday, predicting that the country's gross domestic product (GDP) would rise by 3.9 percent in 2021.

The German economy is "recovering strongly" and would likely return to its pre-crisis level during the third quarter of this year, IfW Kiel said. For 2022, the institute continues to expect GDP to grow by 4.8 percent.

"The steam pressure in the German economy is high," said Stefan Kooths, head of forecasting at IfW Kiel, in a statement.

As the COVID-19 pandemic is receding, trade and services requiring a high degree of contact should "benefit from a strengthening of private consumer spending," which is expected to increase by 2.

4 percent in 2021 and by 8.2 percent in 2022, according to the institute.

Despite the record-high level of new orders, the recovery of Germany's manufacturing industry is "currently hampered by supply bottlenecks," IfW Kiel noted. Further economic momentum from this sector is not expected until the end of the current year.

"Demand, additionally fueled by pent-up purchasing power and government stimulus programs, is meeting supply constraints due to supply-side frictions," Kooths said, adding that "all in all, the signs are pointing to a strong expansion."