Germany's economic institutes cut GDP 2021 growth forecast to 3.7% - sources

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FILE PHOTO: The financial district with Germany's Deutsche Bank and Commerzbank is pictured in Frankfurt

BERLIN (Reuters) - Germany's economic institutes will cut their joint 2021 growth forecast for Europe's largest economy to 3.7% from 4.7% previously due to a longer than expected COVID-19 lockdown, two people familiar with the decision told Reuters on Wednesday.

The institutes, which are expected to release their joint growth forecast on Thursday, will lift their GDP growth estimate for 2022 to 3.9% from 2.7% previously as private consumption is expected to boost overall output, the sources added.

The institutes' estimates form the basis for the government's own growth forecast which the economy ministry will present later this month.

In January, the government said it expected gross domestic product to grow by 3% this year, following a drop of 4.9% in the previous year caused by the coronavirus.

The figures are the latest sign that the economy will need longer than initially thought to reach its pre-crisis level.

Export-oriented manufacturers are currently benefiting from higher demand from China and the United States, whereas the domestically focussed services sector is suffering under extended curbs to contain a third wave of COVID-19 infections.

(Reporting by Holger Hansen, Christian Kraemer and Rene Wagner; Writing by Michael Nienaber; Editing by Maria Sheahan and Douglas Busvine)