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FRANKFURT (Reuters) – Supply chain bottlenecks and new cuts to the COVID-19 pandemic will halt growth in Germany by the end of the year, delaying the recovery of Europe’s largest economy, the Bundesbank said on Friday.
Struggling with a shortage of supply, Germany’s vast industrial sector has been unable to meet rising demand in recent months and it is now expected that the bottles will last until next year, which was expected to be a strong rebound.
“The German economy will slow down in the last quarter of 2021 and the first quarter of 2022 due to the pandemic, but it will pick up momentum again next spring,” the central bank said in a two-year update. its economic outlook.
“Although the pandemic-related cuts and supply constraints on intermediate goods will halt growth in the last quarter of 2021 and the first quarter of 2022, … private consumption is expected to rise significantly from spring.”
The Bank now expects 4.2% growth in Germany in 2022, below the 5.2% forecast six months ago and below the 4.6% expected by the European Commission.
But growth in 2023 is now at 2%, almost double the forecast of 1.7% in June, suggesting that the expansion will be delayed rather than lost.
Inflation forecasts also rose.
Price growth is expected to remain above the European Central Bank’s 2% target over the Bundesbank’s overall projection horizon.
Consumer price inflation is now at 3.6% in 2022, double the rate projected six months ago, before falling to 2.2% in 2023 and 2024, according to the German central bank.
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