Economic divide persists, according to Altmaier's assessment
Germany's Economic Outlook for 2021 and 2022
Germany's economic outlook for the years 2021 and 2022 has been the subject of discussion by Peter Altmaier, the Federal Minister of Economics, and the Council of Economic Experts. The projections for Germany's growth have been influenced by several key factors.
According to the Council of Economic Experts, Germany is expected to experience economic growth of 3.1 percent in 2021, with a prediction of 4.0 percent (4.1 percent calendar-adjusted) for 2022. This growth is anticipated to bring the pre-crisis level back by the end of 2021/22.
The government's fiscal stimulus and investment packages, particularly growth-oriented infrastructure and defense spending, have played a significant role in supporting economic growth expectations. The resolution or easing of trade conflicts, especially with the United States, has also been seen as critical for a more optimistic growth outlook.
Business and investor confidence have shown a significant rebound, with indices such as the ifo Business Climate Index and ZEW expectations index reflecting companies' anticipation of a recovery following a period of volatility and pandemic-related disruption. Additionally, a surge in demand ahead of US tariffs implementation provided a temporary boost to certain sectors.
However, analysts have cautioned that growth might stall somewhat in the second quarter of 2021 as this initial rush slows down. Longer-term structural factors such as Germany’s demographic challenges and the transition to green energy also pose challenges, although they were less emphasized as immediate drivers for growth in 2021-2022.
Despite the positive outlook, Altmaier emphasizes the importance of swift progress in vaccinations and consistent use of rapid tests for the recovery of the entire economy. He has stated that the current German economy remains divided, with industry performing relatively well while services and retail struggle under corona restrictions.
In a recent photo by dts Nachrichtenagentur, Altmaier, representing the CDU, can be seen expressing his views on the matter. No new economic growth predictions or recovery facts have been mentioned in the latest discussions.
The finance ministry's investment packages, including growth-oriented infrastructure and defense spending, have been crucial for Germany's economic growth outlook. Business confidence, as measured by indices like the ifo Business Climate Index and ZEW expectations index, has significantly rebounded due to the anticipated economic recovery.
