Due to the uncertainty regarding the further economic consequences of the pandemic, the Bundesbank puts a question mark behind its latest economic forecast.

The delta variant and declining momentum in vaccination could lead to stricter containment steps again, writes the Bundesbank in its monthly report for August, which was published on Monday.

However, this will only put a strain on the economy in the autumn quarter.

From today's perspective, economic growth in the current year could be on average "somewhat lower than expected in the June projection," writes the central bank in its report.

In June, the Bundesbank had forecast a calendar-adjusted increase in gross domestic product (GDP) of 3.7 percent for the current year.

In December it had only forecast an increase of 3.0 percent.

A growth of 5.2 percent was forecast for 2022.

The Bundesbank rated the destroyed infrastructure and production capacities in the areas hit by the flood disaster as a manageable negative factor.

“Overall, it remains to be seen whether GDP will return to its pre-crisis level in summer or not until autumn,” the central bank explained.

Economy should grow strongly in summer

The Bundesbank experts were optimistic about the summer months.

“The German economic output is likely to grow strongly in the summer and increase even more strongly than in the spring,” says the monthly report.

The hospitality, travel and retail sectors could benefit particularly strongly from containment measures that have been significantly relaxed since mid-May. In addition, the order books in construction and in industry are well filled. Here the Bundesbank saw the first signs that the supply bottlenecks for some preliminary products and raw materials are no longer worsening as significantly as they were in the second quarter. Most recently, the vast majority of German companies had complained about such delivery problems, as a recently published survey by the German Chamber of Commerce and Industry (DIHK) shows.