Sunday February 21, 2021
Wirtschaftsweiser sees risks
Feld: Third wave threatens the economy
The n all plans would be “obsolete”.
The chairman of the economy, Lars Feld, sees great risks for economic development and has dampened the expectations of companies about opening plans. Feld told the German Press Agency: “You can make all sorts of plans. But if a third wave comes, these will be invalid.”
The virus variants are a general uncertainty that also has an economic impact.
Feld announced that the German Council of Economic Experts will revise its economic forecast for the current year downwards. In the forecast presented in November, the economic wise men assume that the gross domestic product will grow by 3.7 percent in 2021. In March the Council will publish its updated economic forecast.
“At the moment we can no longer be as optimistic as we were in November,” said Feld. “A 3 in front of the decimal point is still possible if further border controls are avoided and there are gradual openings after the lockdown.
The n there can be strong growth from the second quarter.”
However, Feld continues to see major risks for economic development. “If the virus variants continue to spread and there is a third wave, all forecasts are wasted.” To do this, it must be seen how successful the vaccinations were. After a 5 percent slump in economic output last year, the federal government expects gross domestic product to grow by 3 percent in 2021. This is less than previously expected.
“Manufacturing is still doing well”
The hard hit industries are now in the foreground. Manufacturing and construction are currently still running relatively well. Because of the border controls in areas with virus variants, there is a risk of interrupting value chains . That would hit manufacturing hard. ”
The lockdown with the closure of restaurants and many retail stores was recently extended by the federal and state governments to March 7th. Chancellor Angela Merkel and the prime ministers of the federal states want to discuss how to proceed on March 3rd. Business associations are vehemently calling for an opening plan.
The fact that the Council of Economic Experts has so far been more optimistic in its forecast than others has to do with developments in manufacturing and construction. Feld said at the same time: “If the border controls should spread even further, then the same problem will arise as last spring, because the manufacturing industry would then no longer be able to produce to the same extent.
The re are border controls to the Czech Republic, for example – an important production location also for German companies.
Praise and criticism of politics
Feld said that politicians had taken the right measures overall in the crisis, with tax loss carry-backs having to be extended to two years and too much bureaucracy in bridging aid. At the same time, he criticized that past failures would now have to be paid dearly, especially the arrears in the digitization of schools and public administration. “You would have had to work much, much more intensively on it in the summer.
The experts are also known colloquially as the “economic modes”.