German industry 'cautiously optimistic', expects 3.5% GDP growth in 2022

The Federation of German Industries is 'cautiously optimistic' about the economic recovery in industry and expects the country's GDP to grow 3.5% in 2022, the BDI has said

The Federation of German Industries (BDI) is "cautiously optimistic" about the economic recovery in industry and expects the country's gross domestic product (GDP) to grow 3.5 per cent in 2022, the BDI has said.

German exports are to grow around half as fast as in 2021, increasing by four per cent in 2022 year-on-year, according to the BDI on Thursday, Xinhua news agency reported.

"Order books are full, but production is not keeping pace with demand," BDI President Siegfried Russwurm said.

"Pandemic-related restrictions and supply bottlenecks are affecting large parts of the economy."

Many German companies in the automotive, electrical and mechanical engineering industries are affected by supply bottlenecks, which would slow down industrial value creation by more than 50 billion euros ($57.4 billion) in 2021 and 2022, according to the BDI.

The German economy could "face another stop-and-go year," the BDI noted. However, "with the right framework conditions, there is also a chance that the new year will be the year with the strongest economic momentum since 2010."

High energy costs, slow digital transformation, lack of infrastructure investment and high taxes would make the business location less and less attractive for companies from Germany and abroad, Russwurm added.

"Policymakers must reverse the negative trend of recent years, go beyond crisis management to increase the pace of action and embark on a growth course," he said.

The German Council of Economic Experts, an official advisory body to the German government, expects the country's GDP to grow 4.6 per cent in 2022. Economic growth in Germany should "continue to pick up, provided that industrial output and consumer demand for services normalise next year." (1 euro $1.15)

--IANS

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