Germany eyes 4% 2021 GDP growth

Photo: EPA Peter Altmaier

Germany expects the economic growth of the country to reach as high as 4%, AP reported. The 2021 economic prospects were revealed by Germany's economic minister Peter Altmaier. The main factor behind the optimistic forecast is linked to the sharp decline of the spread of pandemic and the reset of business activities.

The sparkle of optimism comes to mark an anniversary of the government’s agreement on a stimulus package to help restart the economy, which included cutting value-added tax during the second half of last year and giving families a one-time 300-euro payment per child.

Other aid packages have helped keep companies above water during months of virus closures, while extensive use of a short-term salary support programme has kept workers on payrolls and unemployment in check.

Last year, Germany’s gross domestic product shrank 4.9%. That was the biggest decline since the financial crisis in 2009, but Germany did better than several other European countries because manufacturing took less of a hit than services during the pandemic. “We can say today that the economic motor is running again,” Altmaier said.

“We believe that the economy will grow by at least 3.5% this year, and I think it is even possible that we will achieve growth of somewhere between 3.5% and 4%,” he added. Altmaier said data has improved since the government raised its official 2021 forecast from 3% to 3.5% a month ago. Coronavirus restrictions are being eased across Germany as infection figures have fallen sharply and the vaccination campaign has accelerated. Germany has now given at least one dose to 44.6% of its population and fully vaccinated 19.6%.

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