Industrial supply difficulties obstacle the German economy to restore pre-pandemic levels


The German Central Bank expected a sharp rise in the inflation rate in Germany compared to its current levels due to the reduction of value-added tax during the previous year.
The bank stated in its monthly report issued yesterday that “from today’s perspective, it is likely that inflation rates during the period from September to the end of the year will range between 4 and 5 percent.”
At the same time, analysts expect the inflation rate to decline significantly at the beginning of next year, but it will remain above the level of 2 percent until the middle of the year.
According to the “German”, the central bank said, “The German economy continued the recovery that it started last spring, but at a faster pace. In general, it is possible that Germany’s economic output will grow during the third quarter of this year, stronger than last spring.”
At the same time, the central bank does not expect the economy to return to pre-coronavirus levels this summer, due to the difficulties it is facing on the supply side in the industry.
The bank stressed that the new German government will inherit an economy that has gained momentum in recent months, with its gradual recovery from the repercussions of the Corona pandemic.
Europe’s largest economy rebounded from recession earlier this year, thanks to the easing of lockdown measures linked to the fight against the Corona pandemic.
“In the summer of 2021, the German economy continued the recovery that began in the spring at an increasing pace,” the Bundesbank said. “Private consumption and service providers in particular received a strong boost, as pandemic-related restrictions have now been largely relaxed and removed.”
However, it is not yet clear what will emerge from yesterday’s general election, with business leaders calling on major parties to avoid political uncertainty and form a new coalition as soon as possible.
The election winner, the Social Democrats, and its opponent, the Christian Alliance, both launched calls for talks to form a new coalition to govern Europe’s strongest economy.
This comes at a time when the Ifo Institute for Economic Research said that Germany’s industrial sector has become more optimistic about exports, after expectations fell last August.
The institute announced at its headquarters in Munich yesterday that its index on industrial export expectations rose in September to 21 points, an increase of four points compared to last August.
The institute’s statement said that German industrial exports showed that they are “surprisingly strong in the face of the crisis in the purchase of raw materials and intermediate products.”
According to the data, companies in almost all industries are more optimistic than they were a month ago. The optimism was most pronounced in the auto sector, which expected a significant increase in foreign sales.
According to the institute’s data, the situation is similar in the electrical industries sector.
The index rose in the chemical industries sector to its highest level since November 2010. According to the index, only the textile industry sector is currently expecting a decline in its exports.
On the other hand, Franziska Joffe, the potential future mayor of Berlin, announced that she would respect the results of the referendum held in the German capital on the confiscation of major housing companies.
“A draft legislation that stipulates this must now also be drawn up, but this draft must be reviewed to ensure its conformity with the constitution,” the Social Democratic candidate for mayor of Berlin said yesterday in statements to the “Berlin-Brandenburg” radio.
Geffi stated that the new Berlin state parliament should look very carefully at what is constitutionally possible, adding that “Berlin should not get another negative ruling from the Federal Constitutional Court.”
It is reported that Germany’s highest court has finally abolished the rent cap in Berlin.
The majority of Berliners voted in a referendum yesterday in favor of confiscating companies that own more than 3,000 apartments.
The referendum initiative provides for converting some of the apartments belonging to these companies into “social” housing or placing them under public administration. This would affect about 240,000 apartments, which make up 15 per cent of the total rental housing in the German capital.
The companies will be compensated financially, with the value of the settlements expected to reach 13.7 billion euros (about 16 billion dollars).
The result of the vote is not legally binding, but observers expect the measure to put pressure on parliamentarians in Berlin to deal with the housing issue in a city suffering from rising rents and property prices.
After the SPD’s victory in Berlin, Joffe had good chances to lead the state government as mayor of Berlin. Jevi had opposed the confiscation of housing companies during her election campaign.
Voters approved a ballot initiative to demand the expropriation of large commercial real estate companies and for a new public housing company to manage part of its leased shares.
The Deutsche Fohnen & Co. initiative, which called for the referendum, believes it will be able to stem the rise in rents and ensure affordable rents in the long term.
The referendum comes in the midst of a campaign to acquire Fonvia and Deutsche Funen Real Estate. The two companies together own about 550,000 apartments worth a total of more than 80 billion euros (about $ 94 billion), mostly in Germany.
Deutsche Fohnen owns 114,000 apartments in Berlin alone.
And “Fonofia”, the largest real estate group in Germany, obtained a majority stake in its rival “Deutsche Fonen”, amid a worsening housing crisis in major cities in Germany.
And “Fonofia”, which is based in Bochum, announced yesterday that until late last Friday, the company had acquired 50.49 percent of the capital of “Deutsche Funen” and obtained voting rights.
The Fonovia announcement also marks the company’s third attempt to acquire Deutsche Fonen, Germany’s second-largest real estate company.
Fonovia’s success followed a move by its CEO, Rolf Buch, in which he waived several conditions in his previous bids for the acquisition.


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