Real economic output in Germany will grow by 3.5 percent this year. The BDI confirms its January forecast. A return to pre-crisis levels can only be expected by the second half of 2022. Last year, gross domestic product dropped by 4.9 percent.
The agreements reached by the federal and state governments on 3 March set the path for a phased re-opening. The best the economy can hope for in the first quarter is a sideways movement. The recovery will then firm up from the second quarter onwards.
Powerful effect in investment: We expect investment in plant and equipment to rise by seven percent (last year: down 12.1 percent), and construction investment to increase by one half a percent (last year: up 1.9 percent).
Foreign trade is boosting the economy: The BDI anticipates exports to rise by six percent (last year: down 9.4 percent) and imports to be up by a clear 5.5 percent (last year: down 8.5 percent).
Consumption spending of private households will increase by four percent this year (last year: down 6.1 percent). The tax cuts that took effect at the start of the year and high savings from last year will animate consumption.
Industrial production is also pointing up. New orders for industry are currently substantially higher than one year ago. The purchasing managers’ index for manufacturing is also indicating expansion, recently reaching a three year high.