Germany's economic institutes are slashing their 2021 growth forecast for Europe's largest economy to 2.4% from 3.7% as supply bottlenecks slow the recovery, two people familiar with the decision told Reuters today.

The four institutes - the RWI in Essen, the DIW in Berlin, the Ifo in Munich and Halle's IWH - are expected to release their joint forecast tomorrow.

They will also raise their forecast for growth next year to 4.8% from 3.9%, and will project 1.9% economic growth for 2023, the two people said.

The International Monetary Fund this week cuts its 2021 growth forecast for Germany by half a percentage point from its July prediction to 3.1%.

Germany's GDP slumped by 4.6% last year due to the coronavirus pandemic.

Statistics office data showed last week that the volume of exports fell in August for the first time in 15 months, slipping unexpectedly as the supply chain issues plaguing the global economy continued to bite.

The German government, which so far has been forecasting growth of 3.5% for this year and 3.6% for next, is expected to update its estimates this month as well.

Official data on third-quarter economic growth is due on October 29.