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- German economy probably shrank 1.8% in first quarter due to lockdown - institutes
German economy probably shrank 1.8% in first quarter due to lockdown - institutes
Reuters reports that leading economic institutes revised their joint growth forecast for Europe's largest economy and now expect that German economy shrank by 1.8% in the first quarter because of COVID-19 restrictions.
Economy Minister Peter Altmaier said he did not expect the economy to reach pre-pandemic levels before the end of the year. But he added that the industrial sector was getting through the crisis relatively well thanks to robust demand for abroad.
The institutes now expect gross domestic product to grow by 3.7% this year, down from their previous forecast of 4.7%. But the institutes raised their GDP estimate for 2022 to 3.9% from 2.7%, expecting household spending to rebound once coronavirus restrictions are lifted again.
The institutes estimate that COVID-19 restrictions have led households to save some 200 billion euros ($239.54 billion), Torsten Schmidt from the RWI institute said. That money is likely to boost overall economic growth once curbs are lifted, enabling consumers to start spending again during the summer.
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