The growth of the first European economy should only be 2.4% this year, against an expected increase of 3.7% so far by the economic institutes
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It’s a disappointing sign for the recovery of the European economy: the German engine starts much more slowly than expected. Overseas growth will only increase by 2.4% in 2021, calculated the country’s major business community institutes in their fall report, published on Thursday, October 14. It is a serious cold shower: they were in the spring on a much more vigorous rebound of the euro zone’s first economy at 3.7% for the current year.
Not surprisingly, the “Made in Germany” is very affected by the supply problems in raw materials and electronic chips, which hinder industrial production. In the automotive industry, the consequences of the shortage of semiconductors are considerable. Some production lines are interrupted, the Opel site in Eisenach is totally stopped until the end 2021. This crisis even affects the manufacturers of luxury vehicles. Mercedes announced in early October, having delivered only 428,000 models from July to September, … 30% less than the previous year at the same period.
Consequence, it is currently the services close to the consumer, like the restoration, who have been growing since the spring, thanks to the lifting of certain anti-Covid restrictions. But the situation threatens to darken with the winter months, in the case of an epidemic recovery. “With the cold season, it is expected that infections will remain at the same level, which means that the services will turn below their usual activity,” highlight the economists.
These expect the fact that the health situation and supplies will normalize gradually in the coming months, in order to reach, in the summer of 2022, the level of pre-crisis production … if No new variant disrupts the situation. This should result in increased production by 4.8% in 2022 and 1.9% in 2023. Faced with the anxieties currently expressed in Germany as to the pace of inflation, the business institutes are reassuring: they. believe that rising prices will certainly be 3% this year, but it will fall to 2.5% in 2022 and will return to 1.7% in 2023.
But the difficulties will not be overcome. The growth of the coming years will be strongly affected by the two major future challenges of the German economy, which will weigh both on production and consumption: the aging of the population, with the arrival at retirement of numerous generations after the war, and the decarbonation efforts of the economy. This double event has the consequence that “fewer per capita workers will have to generate the wealth of the country, and a larger share of the generated income [will have to be invested in climate protection,” emphasize economists.
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