Germany’s central bank, Bundesbank, said that the economy is on track to overcome a pandemic-related crisis this year, as it upgraded its GDP and inflation forecasts for 2021 and 2022.
The central bank chief Jens Weidmann said that economic forecasts are based on successful vaccination campaigns in the country. "This ensures strong catch-up effects, especially in the service sectors that were previously particularly impaired and in private consumption," he noted.
Key takeaways via Reuters
“German economy to grow by 3.7% this year, above an earlier forecast for 3%, while for next year it raised its growth projection to 5.2% from 4.5%. In 2023, it sees growth at 1.7%.”
“Inflation is now seen at 2.6% this year, up from 1.8% seen previously. Inflation will then slow to 1.8% next year and 1.7% in 2023.”
Market reaction
EUR/USD remains unfazed by the upbeat German economic assessment, as it trims gains to now trade at 1.2183 amid a tepid bounce attempted by the US dollar across the board.
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