Private Sector Growth in UK and US Affected by Delta Variant and Shortages – Business Direct | Business
Economic growth in Germany could fall short of projections this year and the resurgence of the coronavirus pandemic could strain the economy in the fall, the Bundesbank said in a monthly report on Monday.
Europe’s largest economy is set to grow 3.7% this year and 5.2% in 2022, but the first few weeks of the rebound have been more timid than expected and that will likely weigh on the full-year figure as well , said the Bundesbank.
Germany is still expected to have experienced robust expansion in the summer months, with services benefiting from the easing of restrictions as the number of infections declined, boosting tourism revenues.
While some restrictions could be reintroduced in the fall if infections continue to rise, they are unlikely to be as stringent as in the past given Germany’s progress in vaccinating its population, added the Bundesbank.
But a drop in the pace of vaccinations poses a risk and sentiment indicators point to heightened concern as Europe grapples with the more infectious Delta variant of COVID-19.
“The Delta variant and a decline in the dynamics of vaccination could again lead to more stringent protective measures,” added the Bundesbank. “This would then put more pressure on the economy in the fall quarter.”