German government slashes GDP growth forecast 2021

German government slashes GDP growth forecast 2021

The German government slashed this year’s economic growth predictions to 3% on Wednesday citing the impact of coronavirus lockdowns, a drop from last autumn’s 4.4% forecast.

Chancellor Angela Merkel and state leaders agreed last week to extend the shutdown until mid-February.

GDP Growth forecast

“We are currently seeing a flattening of the number of infections, which is giving hope,” said Economy Minister Peter Altmaier said.

The economy shrank by a smaller-than-expected 5% last year, which marked the second-biggest economic plunge in the country’s post-war history. The record slump of -5.7 came in 2009 in the aftermath of the global financial crisis.

Altmaeir said Germany was doing relatively well in international comparison, but that everything needed to be done to ensure a steady upturn in economic growth. Among these, he said, was a need to relieve companies of the burden of excessive bureaucracy.

Germany was relatively successful during the first phase of the coronavirus pandemic but saw infections shoot up during autumn and into winter.

The government closed restaurants, bars, sports and leisure facilities on November 2 in an effort to curb the escalation in cases. While there was some success in doing so, numbers remained stubbornly high. Schools and nonessential shops were closed on December 16.

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