Europe

EXCLUSIVE German govt revises 2021 growth forecast up after strong Q4 - source

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The skyline with its financial district is photographed during sunset as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, October 26, 2020, REUTERS/Kai Pfaffenbach/File Photo

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BERLIN, April 26 (Reuters) - The German government has raised its growth forecast for this year to 3.5%, compared with the 3% growth it was expecting back in January, a source said, adding that the upward revision was justified by a stronger-than-expected fourth quarter.

The source added that the government expected Europe's largest economy to expand by 3.6% in 2022.

The economy ministry declined to comment on the figures. The government is due to present its 2021 economic growth forecast on Tuesday.

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Germany's leading economic institutes said earlier this month they expected the gross domestic product to grow by 3.7% this year and 3.9% in 2022.

German business morale improved only slightly in April as a third wave of COVID-19 infections and a semiconductor shortage in the motor vehicle sector slowed a recovery in Europe's largest economy, a survey showed on Monday.

Export-oriented manufacturers are currently benefiting from higher demand from China and the United States, whereas domestically-focussed services are suffering under extended restrictions to contain a third wave of COVID-19 infections.

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Reporting by Holger Hansen; Writing by Thomas Escritt; Editing by Mark John and Maria Sheahan

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