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In a bi-annual monthly outlook prepared for the German Economy Ministry, the country’s leading research institutes have cut their joint 2021 growth forecast for Europe’s economic powerhouse to 3.7% from 4.7%, Bloomberg reports, citing a person familiar with its latest outlook to be published Thursday.

Additional details

“The outlook is prepared by the DIW, Ifo, IfW, IWH and RWI institutes and helps guide the government’s own forecasts and budget planning.”

“The signs point to economic recovery” over the rest of this year. “The vaccination campaign, which is gaining momentum, and a strong global economy are fostering confidence.”

“The government’s forecast is for growth of 3% this year, after a contraction of around 5% in 2020, and it expects a return to pre-pandemic levels in mid-2022.”

Market reaction

EUR/USD holds steady around 1.1980, slightly off the monthly peaks ahead of the US data and the German Economy Ministry’s report.

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