Economic output in Germany contracted by 1.8 percent in the first quarter of 2021. This was primarily due to higher Corona case numbers and stricter containment measures. As a result, there was a sharp decline in private consumption and business investment. In early summer, the pandemic was contained for the time being; the vaccination program, which got off to a rather slow start at the beginning of the year, got off to a better start in the spring and the pandemic situation eased. The various lockdown measures can gradually be relaxed. As a result, the economy should now pick up significantly in the summer. In the second quarter of 2021, economic growth is probably still only expected to be modest.
In the second half of the year, strong growth in GDP can then be expected. Exports have been recovering since the summer of 2020 and will continue to grow with solid rates. Expansionary fiscal and monetary policies further support the recovery. For 2021 as a whole, I currently expect only a growth rate of 3.5 percent. In 2022, I currently expect a growth rate of 3.8 percent (for 2022, I am somewhat less optimistic for the German economy than other forecasters).
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