12 Jan 2021
The BDI industry association in Germany said on Tuesday it forecasts the economy to grow 3.5% in 2021, after plummeting around 5% in 2020.
However, BDI added the Europe’s largest economy wouldn’t return to its pre-coronavirus pandemic level until at least 2022.
The BDI forecast is not as optimistic as government predictions published in October, which forecast GDP to rebound with a growth rate of 4.4%, Reuters reports.
According to BDI President, Siegfried Russwurm the German economy won’t be able to return to its pre-crisis level this year due to the second wave of the coronavirus pandemic.
“But there should be a good chance that it will do so in the first half of 2022,” Russwurm went on to add.
The Federal Statistics Office is set to release a flash estimate for full-year 2020 GDP figures later this week.
In addition, Germany’s government will update its GDP growth forecast for 2021 later in January.
The BDI industry association said it predicts the country’s export-oriented industrial sector to fuel the recovery in 2021 as the global economic outlook for the year has improved.
The association sees exports rising 6% this year, after falling approximately 11% last year.
“The election of Joe Biden as U.S. President facilitates the path for multilateral solutions and joint initiatives for fair competition on the world markets,” Russwurm commented.
“Our companies will benefit from both China, the driver of global growth, and the agreement on an investment pact, even if it is not perfect.”
BDI has urged the government to increase public investment in infrastructure over the next 10 years, reduce corporate taxes and slash red tape for companies attempting to boost their innovation.