The Bundesbank sees Germany at the beginning of a strong upswing.
"The German economy is overcoming the pandemic-related crisis," said Bundesbank President Jens Weidmann on Friday.
"As early as this summer, economic output could reach the pre-crisis level again."
The central bank is now predicting 3.7 percent economic growth for the current year. In December, the Bundesbank economists were not quite as optimistic at 3.0 percent. In the meantime, the Bundesbank is assuming that the corona pandemic can be "pushed back quickly and sustainably" as the vaccinations progress, and that restrictions for the economy and the population will be "quickly loosened", explained Weidmann.
In the unanimous opinion of many economists, private consumption in particular will then pick up.
In addition, in view of the recovery in world trade, positive assessments have recently increased in the export-oriented German industry.
Important sectors such as mechanical engineering, chemicals and pharmaceuticals as well as electronics recently screwed up their forecasts for the current year - even though delivery bottlenecks are making business more difficult for many manufacturers.
An increase of 5.2 percent?
According to many economists, the upswing in the current year will not remain a flash in the pan. The Bundesbank is also much more confident about 2022 than it was six months ago: Instead of 4.5 percent growth, the economists of the central bank of Europe's larger economy are now predicting an increase of 5.2 percent in the next year. In 2023, the growth in real gross domestic product (GDP) will therefore weaken, but will still be 1.7 percent.
Last year, the corona pandemic plunged the German economy into the deepest recession since the global financial crisis in 2009. According to the latest calculation by the Federal Statistical Office, the gross domestic product collapsed by 4.8 percent in 2020. The start of the new year was also bumpy because new restrictions in the course of combating the coronavirus slowed down the hospitality industry and parts of the trade. In the first quarter of 2021, GDP shrank by 1.8 percent compared to the previous quarter.
Many economists are assuming that the German economy will increasingly recover in the current year - thanks in part to the ongoing billions in government aid. Federal Minister of Economics Peter Altmaier (CDU) expects economic growth of up to four percent in this country this year, according to the latest information. Altmaier said that Germany survived the recession better than many expected.
However, consumers in this country also have to be prepared for a significant rise in inflation. Bundesbank President Weidmann confirmed earlier statements by the central bank that inflation rates of four percent are temporarily possible. Two special factors are driving inflation: The value added tax, which was lowered for half a year in the Corona crisis, has been back to its old level since January. In addition, since the beginning of 2021, a levy of 25 euros per tonne of carbon dioxide (CO2) emitted has been due, which is generated when diesel, petrol, heating oil and natural gas are burned. According to the Bundesbank experts, these special effects will expire in the coming year; they then expect inflation rates of 1.8 percent.