German economic institutions – RWI Essen, DIW Berlin, Ifo Munich and IWH Halle – cut their growth forecast for Europe’s largest economy in 2021 to 2.4 percent from 3.7 percent as global supply chain disruption hit recovery countries, according to Reuters.
Institutions are expected to raise their 2022 GDP growth forecast to 4.8 percent from 3.9 percent. An increase of 1.9 percent is projected for 2023. If the new forecast turns out to be correct, the overall growth outlook for the eurozone economy will decline.
Data from Germany’s statistics office showed that exports fell unexpectedly in August for the first time in 15 months as supply chain disruptions plaguing the global economy continued to worsen. Logistics problems have caused a slowdown in global production. The problem was exacerbated by a shortage of shipping containers, clogged ports and a shortage of logistics workers.
Amid supply disruptions, the International Monetary Fund (IMF) cut its forecast for global GDP growth for 2021 to 5.9 percent from its July forecast of 6 percent. The IMF also cut its GDP growth forecast for Germany’s 2021 GDP by 0.5 percent from its July forecast of 3.1 percent.