The German economy faced challenges due to the Covid-19 pandemic, but is expected to recover rapidly. The decline in GDP is temporary, with growth rates of 3.7% this year and 4.8% next year predicted. While private consumer spending has been impacted, the export business is recovering. Employment will take time to improve, with noticeable growth expected in 2022. Inflation will rise above 2% this year but is likely to decrease in 2022. Public budgets have been affected by pandemic-related expenses, leading to a budget deficit above 4% of GDP this year, but it is expected to decrease significantly in 2022.