QI-2021 QUARTERLY REPORT GERMANY
Economy set to grow 3.5 percent in 2021 Powerful effect in investment, foreign trade in boosting roles
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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.
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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.
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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).
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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).
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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.
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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.
