The federal government expects economic growth of 3.5 percent this year. Minister Altmaier expects that the corona slump will be caught up in the coming year.
Dhe federal government is raising its growth forecast for the German economy despite the ongoing corona pandemic. The gross domestic product (GDP) will increase by 3.5 percent this year, as the Ministry of Economic Affairs announced on Tuesday for its spring projections. In January, only 3.0 percent had been estimated. An increase of 3.6 percent is expected for 2022.
“We will have regained our old strengths by 2022 at the latest,” said Federal Economics Minister Peter Altmaier (CDU). “Our economy is strong, robust and ready for a new start.” Last year it slumped by 4.9 percent due to the Corona crisis.
The recovery this year is expected to be carried primarily by exports. These are expected to grow by 9.2 percent in view of the rapid recovery in important sales markets such as the United States of America and China. As a result, the ministry expects higher investments. “Catch-up effects also play a role, as investments have been postponed because of the crisis,” it said.
Construction boom continues
The construction boom is also likely to continue, “due to the low interest rate environment and high demand for housing”. The gradual easing of the corona restrictions should also gradually give the domestic economy and private consumer spending a boost.
After the difficult start to the year, the labor market is expected to gradually pick up. Nevertheless, there is likely to be a decrease in the number of people in employment by 60,000 in 2021. An increase in employment of 290,000 is to follow in 2022.
The government’s growth forecasts are slightly behind those of the leading institutes. In their joint forecast published on April 15 – which Altmaier used as the basis for their own forecast – they predict growth of 3.7 percent this year and 3.9 percent next year. The projections, in turn, form the basis for the tax estimate in May, on which the public budgets of the federal, state, local and social security organizations are based.