Bundesbank upgrades its forecast on the German economy for the year

  • 2021 GDP seen at 3.7% vs 3.0% previously
  • 2022 GDP seen at 5.2% vs 4.5% previously
  • 2023 GDP seen at 1.7% vs 1.8% previously
  • 2021 HICP seen at 2.6% vs 1.8% previously
  • 2022 HICP seen at 1.8% vs 1.3% previously
  • 2023 HICP seen at 1.7% vs 1.6% previously

Given the resilience shown by the economy in Q1 and how the virus situation is getting better, the developments above aren’t too much of a surprise.

The key question will be whether or not inflation pressures will remain transitory going into next year and that is the main risk not just for the ECB but all central banks globally.

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