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German Economy between Lockdowns and Normality: DIW Economic Outlook Spring 2021

Author

Listed:
  • Claus Michelsen
  • Paul Berenberg-Gossler
  • Marius Clemens
  • Max Hanisch
  • Simon Junker
  • Konstantin A. Kholodilin
  • Laura Pagenhardt

Abstract

By lifting lockdown measures as coronavirus case numbers are rising and the vaccine rollout is proceeding slowly, the German economy is being sent on a stop-go course. Re-opening measures will probably be followed by renewed closures, at least regionally, in order to keep the spread of COVID-19 under control. Nevertheless, industry is robust overall, primarily due to good foreign business. In the service sectors, however, recovery will be sluggish following another setback at the beginning of 2021. It is likely that social and economic restrictions will only be able to be sustainably lifted over the course of the third quarter of 2021. Whereas economic output growth of 5.3 percent in 2021 still seemed realistic in December 2020, the current forecast is now projecting a significantly lower figure of 3.0 percent. Currently, growth of 3.8 percent is expected for 2022. The long-term economic consequences of the coronavirus pandemic are still unclear: For example, the extent of corporate insolvencies will not become apparent until later in 2021 at the earliest.

Suggested Citation

  • Claus Michelsen & Paul Berenberg-Gossler & Marius Clemens & Max Hanisch & Simon Junker & Konstantin A. Kholodilin & Laura Pagenhardt, 2021. "German Economy between Lockdowns and Normality: DIW Economic Outlook Spring 2021," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 11(11), pages 94-100.
    • Handle: RePEc:diw:diwdwr:dwr11-11-3
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    More about this item

    Keywords

    Business cycle forecast; ecoomic outlook;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • F01 - International Economics - - General - - - Global Outlook

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