Germany’s economy is expected to grow 2.6% this year, slower than expected, Economy Minister Peter Altmaier said on Wednesday.
The announcement comes as the current government of Europe’s largest economy prepares to hand over the reins to a new coalition.
The German government initially forecasted gross domestic product growth of 3.5% for 2021, but that figure was lowered due to supply chain disruptions and raw material shortages, the minister said.
âGrowth this year will be less than we all imagined,â Altmaier told public broadcaster ARD.
“It will always be one of the fastest growing rates in Europe,” he later told public broadcaster ZDF. “But a lot of goods are not delivered because there is a shortage of raw materials in many areas and it is just having an effect.”
“The rise in energy prices is also a factor,” said the minister. “At 2.6%, the economy will further develop strongly this year.”
Strongest growth expected in 2022
Altmaier said the country’s long-term outlook is good, but the economy “won’t really start to prosper until next year with growth of over 4%.”
The prerequisite, Altmaier said, is to stabilize international supply chains, adding that more microchips should be made in Europe to keep key industries operating at full capacity.
“It is now all the more important that a new government reduces barriers and burdens and emphasizes innovation to avoid blocking economic recovery,” said the Minister of the Economy.
adi / rt (AFP, dpa, Reuters)