German government cuts economic growth forecast for 2022 to 3.6% | Economic news

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BERLIN (AP) — The German government on Wednesday lowered its growth forecast for this year, but said Europe’s largest economy remains “robust” and will return to pre-pandemic size in 2022.

The Economy Ministry predicted that gross domestic product will grow by 3.6%, down from the 4.1% forecast by the German government at the end of October.

The picture has since been clouded by a new wave of coronavirus infections fueled by the highly contagious omicron variant.

GDP rose 2.7% last year, according to preliminary official figures, rebounding from a 4.6% plunge in 2020 when the pandemic shutdowns were at their worst. The government said the growth forecast for this year would bring it back to its pre-crisis size.

“The consequences of the corona pandemic are still noticeable and many companies still have to struggle with them,” Economy Minister Robert Habeck said in a statement. “Nevertheless, our economy is still robust.”

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The German national statistics office estimated that production in Germany fell by 0.5% to 1% in the last quarter of last year. Forecasts are also fragile for the current quarter, raising the possibility of a technical recession.

But there is great hope that the situation will improve as the year progresses. On Tuesday, a closely watched survey showed that business confidence unexpectedly rebounded in January after a six-month decline.

This increase came on the back of a significant improvement in managers’ outlook for the next six months, even as their assessment of the current situation has deteriorated.

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