German Economy between Lockdowns and Normality: DIW Economic Outlook Spring 2021

DIW Weekly Report 11 / 2021, S. 94-100

Claus Michelsen, Paul Berenberg-Gossler, Marius Clemens, Max Hanisch, Simon Junker, Konstantin A. Kholodilin, Laura Pagenhardt

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Abstract

By lifting lockdown measures as coronavirus case numbers are rising and the vaccine rollout is proceeding slowly, the German economy is being sent on a stop-go course. Re-opening measures will probably be followed by renewed closures, at least regionally, in order to keep the spread of COVID-19 under control. Nevertheless, industry is robust overall, primarily due to good foreign business. In the service sectors, however, recovery will be sluggish following another setback at the beginning of 2021. It is likely that social and economic restrictions will only be able to be sustainably lifted over the course of the third quarter of 2021. Whereas economic output growth of 5.3 percent in 2021 still seemed realistic in December 2020, the current forecast is now projecting a significantly lower figure of 3.0 percent. Currently, growth of 3.8 percent is expected for 2022. The long-term economic consequences of the coronavirus pandemic are still unclear: For example, the extent of corporate insolvencies will not become apparent until later in 2021 at the earliest.

Paul Berenberg-Gossler

Research Associate in the Forecasting and Economic Policy Department

Laura Pagenhardt

Research Associate in the Forecasting and Economic Policy Department

Marius Clemens

Research Associate in the Forecasting and Economic Policy Department

Simon Junker

Deputy Head of Department in the Forecasting and Economic Policy Department

Konstantin A. Kholodilin

Research Associate in the Macroeconomics Department



JEL-Classification: E32;E66;F01
Keywords: Business cycle forecast, ecoomic outlook
DOI:
https://doi.org/10.18723/diw_dwr:2021-11-3
Frei zugängliche Version: (econstor)
http://hdl.handle.net/10419/233519

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