Germany's Ifo cuts 2021 GDP growth forecast to 2.5%

Germany’s Ifo economic institute slash the country’s 2021 GDP growth forecast by 0.8 percentage points to 2.5% on Wednesday, in light of supply chain disruptions and slowing post-pandemic economic recovery.

Additional details

“Raises German 2022 growth forecast 0.8ppt to 5.1%.”

“German economy to grow 1.5% in 2023.”

“Sees German inflation at 3.0% in 2021, 2.3% in 2022, 1.6% in 2023.”

Ifo Chief Economist Timo Wollmershaeuser said, "The strong recovery from the coronavirus crisis, originally expected for the summer, is further postponed. Industrial production is currently shrinking as a result of supply bottlenecks for important intermediate goods. At the same time, service providers are recovering strongly from the coronavirus crisis.”

Market reaction

EUR/USD is keeping its range above 1.1700, awaiting the Fed decision for the next directional move. The spot is currently trading at 1.1727, modestly flat on the day.