Supply bottlenecks and the fourth Covid-19 wave are weighing on Germany's recovery, delaying the catching-up process by several months. The Kiel Institute for the World Economy now expects gross domestic product (GDP) to grow by 2.6 percent this year, but only by 4 percent in 2022 (previously 5.1 percent). In 2023, however, the upturn is expected to be steeper at 3.3 percent (previously 2.3 percent). The inflation rate is likely to exceed 3 percent this year and next, and the budget deficit will remain high due to modified debt brake rules.