(Bloomberg) -- Germany’s leading research institutes have cut their joint 2021 growth forecast for Europe’s biggest economy to 3.7% from 4.7%, according to a person familiar with their latest outlook to be published Thursday.

The twice-yearly outlook is prepared for the Economy Ministry by the DIW, Ifo, IfW, IWH and RWI institutes, and helps guide the government’s own forecasts and budget planning.

Germany’s economy likely shrank again in the first quarter due to restrictions introduced to stem the coronavirus. However, output has held up relatively well compared with last spring, when tougher lockdown curbs had a far greater impact and gross domestic product plunged by almost 10% in the second quarter.

The Economy Ministry said this week that “the signs point to economic recovery” over the rest of this year. “The vaccination campaign, which is gaining momentum, and a strong global economy are fostering confidence,” the ministry said in its latest monthly report.

The government’s forecast is for growth of 3% this year, after a contraction of around 5% in 2020, and it expects a return to pre-pandemic levels in mid-2022.

The institutes are due to publish their outlook at 10 a.m. in Berlin. The cut to the 2021 forecast was first reported by Reuters.

©2021 Bloomberg L.P.