BERLIN (Reuters) - Germany's BDI industry association said on Thursday it expected Europe's largest economy to grow 3.5% this year, giving a more cautious forecast than the government as it warned companies could face another "stop-and-go year" due to the pandemic.
"The order books are full, but production is not keeping pace with demand. Pandemic restrictions and supply bottlenecks affect large parts of the economy," BDI President Siegfried Russwurm said.
The BDI forecast is less optimistic than the government's estimates, published in October, in which Berlin predicted gross domestic product growth to accelerate to 4.1% this year from an estimated 2.6% in 2021.
The industry lobby group said it expected export growth to halve to some 4% this year, pointing to supply problems with microchips and other important components which have hit production in Germany's large automobile sector badly.
Russwurm said the Omicron coronavirus variant was clouding the growth outlook around the world, with Germany in particular being exposed to the risk of China, its biggest trading partner, becoming paralysed again if authorities there reacted to a renewed spread with its strict "zero COVID" lockdown measures.
The BDI president backed calls from Chancellor Olaf Scholz to improve Germany's relatively low inoculation rate by introducing a controversial coronavirus vaccination mandate.
Some 72% of Germany's population is double vaccinated against the virus and around 43.5% have received a booster shot.
"It's definitely not an option now to somehow continue to navigate until the warmer season, then enjoy the lower incidence rates over the summer - and realize in autumn again that the vaccination rate is too low," Russwurm said.
Germany on Thursday morning reported a record 81,417 new infections over the past 24 hours due to the highly contagious Omicron variant. Its seven-day incidence rate per 100,000 people jumped to 427.7, quickly approaching the country's all-time high of 452 reached late November.