German government raises 2021 economic growth forecast to 3.5% from 3%

Dhwani Mehta FXStreet

The German government lifted the 2021 GDP growth forecast to 3.5% from 3.0% estimated in the January outlook, Economy Minister Peter Altmaier confirmed on Tuesday.

Additional takeaways

Expects 2022 GDP growth forecast of 3.6% in the first official estimate.

Expects consumer price inflation to jump to 2.2% in 2021, ease back to 1.5% in 2022.

Forecast based on assumption that virus restrictions are eased during Q2.

Expects economy to reach pre-crisis levels in 2022 at the latest.

Expects strong domestic demand, household spending to support recovery once curbs are lifted.

Market reaction

EUR/USD remains under pressure around 1.2065 on the above headlines, as the euro shrugs off the upward revision to the German growth forecasts.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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