German economy expected to contract further in first quarter: Bundesbank

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FILE PHOTO – The skyline of the banking district is pictured in Frankfurt, October 21, 2014. The European Central Bank will publish the results of Europe’s most comprehensive review of the health of its banks on October 26. REUTERS/Ralph Orlowski

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FRANKFURT, Feb 21 (Reuters) – Germany’s economy is likely to contract again in the current quarter as a fresh wave of coronavirus infections keeps many people from going to work, the Bundesbank said on Monday. predicting a spring rebound.

Europe’s biggest economy went into reverse in the last three months of 2021 as its important industrial sector was hit by supply problems.

These were now easing, but the rapid spread of the Omicron variant was affecting services and employment in general.

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“Unlike previous waves of the pandemic, it is not only activity in the service sector that is likely to be affected by containment measures and behavioral changes,” the German central bank wrote in a monthly report.

“Instead, the absence from work linked to the pandemic is likely to significantly dampen economic activity also in other sectors.”

The Bundesbank said German industry was giving the economy a “positive boost” from easing supply bottlenecks and strong demand, paving the way for a spring rebound if the pandemic was calming down.

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Reporting By Francesco Canepa; edited by John Stonestreet

Our standards: The Thomson Reuters Trust Principles.

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