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German economy minister slashes 2021 growth forecast

October 27, 2021

Economy Minister Peter Altmaier presented the new forecast for economic growth in Germany. He said the government predicts lower-than-expected growth this year but a boom the following year.

German Economy Minister Peter Altmaier comments a graph during a press conference to present the German government's economic spring projection
Economy Minister Peter Altmaier said the country's long-term prospects are goodImage: John Macdougall/AFP/Getty Images

The German economy is projected to expand by 2.6% this year, slower growth than what had been expected, Economy Minister Peter Altmaier said Wednesday.

The announcement comes as the current government of Europe’s largest economy prepares to hand over the reins to a new coalition.

The German government originally forecast a gross domestic product growth of 3.5% for 2021, but that figure was downgraded due to supply chain disruptions and shortages of raw materials, the minister said.

"Growth this year will be year will be lower than we had all imagined," Altmaier told public braodcaster ARD.

"It will still be one of the strongest growth rates in Europe," he later told ZDF public television. "But many goods are not being delivered because there is a shortage of raw materials in many areas and that is simply having an effect."

"Higher energy prices are also a factor," the minister said. "At 2.6%, the economy will still expand strongly this year."

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Greater growth expected in 2022

Altmaier said the country's long-term prospects are good, but the economy "will only really begin to boom next year with growth of over 4%."

The prerequisite, Altmaier said, is to stabilize international supply chains, adding that more microchips would have to be manufactured in Europe to keep key industries working at capacity.

"It is now that much more important that a new government reduces obstacles and burdens and put the emphasis on innovation to avoid stalling the economic recovery," the economy minister said.

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adi/rt (AFP, dpa, Reuters)