German economy will return to normal by end of 2022

Gross domestic product (GDP) will plummet by 5.4 per cent in 2020, the country's leading economic institutes said.

German economy will return to normal by end of 2022
dpa

Berlin (dpa) - The German economy will not return to normal until the end of 2022, the country's leading economic institutes said on Wednesday as they announced a downward revision of an earlier growth forecast.

Gross domestic product (GDP) will plummet by 5.4 per cent in 2020, the institutes predicted, a larger contraction than the 4.2-per-cent estimate they issued in April at the height of the pandemic.

Government economists said in their latest forecast that GDP would contract by 5.8 per cent in 2020.

Europe's biggest economy will rebound with a growth rate of 4.7 per cent in 2021, and normalize with a growth rate of 2.7 per cent in 2022, the institutes predicted.

The estimate is issued twice a year by the group of institutes comprising the German Institute for Economic Research (DIW), Munich's Ifo Institute for Economic Research, the Kiel Institute for the World Economy (IfW), the Halle Institute for Economic Research (IWH) and the RWI Leibniz Institute for Economic Research in Essen.

Stefan Kooths of the IfW said that economic recovery in Germany was hampered by sectors that rely on social proximity such as restaurants, tourism, events and aviation, which have been hit hardest by the pandemic.