Economic growth in Germany could miss projections this year. The Bundesbank’s monthly report stated that a major unexpected strain can be put upon the economy in the autumn, because of the resurgence of the coronavirus. Europe’s biggest economy is expected to grow by 3.7% this year and 5.2% in 2022. The early weeks of the rebound were timider. The Bundesbank said that this will likely weigh on the full-year figure.
In this summer months there is a great expansion in Germany. This is after the easing of restrictions as infection numbers declined. This has boosted the tourism income. Even though some restrictions could be reintroduced in autumn, if infections continue to rise. Germany is in progress of vaccinating its population. But a drop in the pace of this will increase the risk.
The Bundesbank said that the Delta variant and decline in vaccination pace could lead to stricter protective measures again. This would put a greater strain on the economy in the autumn quarter. The Bundesbank repeated its earlier view that inflation could approach 5% towards the end of the year. Then it may fall back sharply early next year.