BERLIN—Germany’s Ifo economic institute has cut its growth forecast for Europe’s largest economy for this year as supply chain disruptions and a scarcity of chips and other intermediate goods are slowing down the recovery from the COVID-19 pandemic. The institute now sees Germany’s gross domestic product (GDP) growing 2.5 percent this year, down 0.8 percentage points from its previous forecast, and 5.1 percent next year, up 0.8 points. The weaker-than-expected rebound in 2021 follows a plunge of overall economic output by 4.6 percent in 2020 caused by coronavirus restrictions on public life and business activities to contain the spread of the highly infectious disease. The reduced growth forecast also shows that Germany’s next coalition government will inherit a still-fragile recovery from Chancellor Angela Merkel who is stepping down following a Sept. 26 election, after 16 years in power. “The strong recovery from the coronavirus crisis, originally expected for the summer, …
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