FRANKFURT: The German government on Wednesday lowered its economic growth forecast for 2022 as a surge in COVID-19 cases holds back Europe’s industrial powerhouse.
The country’s gross domestic product is now estimated to expand by 3.6 percent, down from 4.1 percent in a previous forecast.
The start of the year “will still be subdued due to the coronavirus pandemic, especially in the service sectors”, the economy ministry said in a report.
But the bounce-back in Europe’s biggest economy should “noticeably” pick up pace once infections level off and global supply chain frictions ease over the course of 2022.
The ministry’s forecast is more pessimistic than that of the Bundesbank central bank, which is penciling in 4.2 percent growth this year.
Germany, whose export-oriented economy is particularly vulnerable to the global supply chain bottlenecks and raw material shortages caused by the pandemic, has seen its recovery lag behind other major European economies like France and Italy.
The flagship auto industry has been hardest hit, with giants like Volkswagen, BMW and Daimler forced to trim production at some plants over a shortage of semiconductor chips.
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