German economy to shrink by 5.2pc

BERLIN, Sept 22 (Arab News): Germany's Ifo institute on Tuesday said Europe's largest economy would likely shrink by 5.2 per cent this year, raising its previous estimate for a 6.7 per cent drop, in the latest sign the damage caused by the Covid-19 pandemic could be smaller than initially feared.

"The decline in the second quarter and the recovery are currently developing more favorably than we had expected," Ifo chief economist Timo Wollmershaeuser said.

For 2021, Ifo cut its economic forecast for Germany to 5.1 per cent growth from its previous estimate of 6.4 per cent. It expects the economy to expand by 1.7 per cent in 2022.