"The German economy will experience a setback in the final quarter of 2021 and the first quarter of 2022 on account of the pandemic, but is set to pick up significant momentum again in spring of next year," the country's central bank, Bundesbank, said in a biannual update of its economic forecasts on Friday.

Key takeaways

"While pandemic-related restrictions and supply bottlenecks for intermediate goods will stall growth in the final quarter of 2021 and the first quarter of 2022, ... private consumption is expected to rise substantially from spring onwards."

“See German GDP growth at 4.2% in 2022 vs 5.2% seen in June; 2023 seen at 3.2% vs 1.7%.”

“See German inflation at 3.6% in 2022 vs 1.8% seen in June.”

“Expect German inflation at 2.2% in both 2023 and 2024, above ECB target.”

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