Germany's Ifo cuts 2021 GDP growth forecast to 2.5%

Dhwani Mehta FXStreet

Germany’s Ifo economic institute slash the country’s 2021 GDP growth forecast by 0.8 percentage points to 2.5% on Wednesday, in light of supply chain disruptions and slowing post-pandemic economic recovery.

Additional details

“Raises German 2022 growth forecast 0.8ppt to 5.1%.”

“German economy to grow 1.5% in 2023.”

“Sees German inflation at 3.0% in 2021, 2.3% in 2022, 1.6% in 2023.”

Ifo Chief Economist Timo Wollmershaeuser said, "The strong recovery from the coronavirus crisis, originally expected for the summer, is further postponed. Industrial production is currently shrinking as a result of supply bottlenecks for important intermediate goods. At the same time, service providers are recovering strongly from the coronavirus crisis.”

Market reaction

EUR/USD is keeping its range above 1.1700, awaiting the Fed decision for the next directional move. The spot is currently trading at 1.1727, modestly flat on the day.

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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