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German industry expects economy to grow by 3.5% in 2022

Christian Fernsby |
Germany's BDI industry association said on Thursday it expected German economy to grow 3.5% this year, giving a more cautious forecast than the government as it warned companies could face another 'stop-and-go year' due to the pandemic.

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Topics: GERMAN   

The order books are full, but production is not keeping pace with demand. Pandemic restrictions and supply bottlenecks affect large parts of the economy," BDI President Siegfried Russwurm said.

The BDI forecast is less optimistic than the government's estimates, published in October, in which Berlin predicted gross domestic product growth to accelerate to 4.1% this year from an estimated 2.6% in 2021.

The industry lobby group said it expected export growth to halve to some 4% this year, pointing to supply problems with microchips and other important components which have hit production in Germany's large automobile sector badly.

Russwurm said the Omicron coronavirus variant was clouding the growth outlook around the world, with Germany in particular being exposed to the risk of China, its biggest trading partner, becoming paralysed again if authorities there reacted to a renewed spread with its strict "zero COVID" lockdown measures.

The BDI president backed calls from Chancellor Olaf Scholz to improve Germany's relatively low inoculation rate by introducing a controversial coronavirus vaccination mandate.

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