German economy shrank 0.7% in Q4 amid resurgence of COVID | Economic news


BERLIN (AP) — Germany’s economy shrank 0.7% in the fourth quarter of last year amid a surge in coronavirus infections and new restrictions, official figures showed Friday.

The quarter-on-quarter decline reported by the Federal Statistical Office follows two quarters of solid gains despite continued supply bottlenecks.

Gross domestic product rose 2.8% for the whole of last year, the bureau said, rebounding from a 4.6% plunge in 2020 when pandemic shutdowns were most severe. That figure was revised up slightly from the preliminary figure of 2.7% announced by the bureau earlier this month.

The government this week cut its growth forecast for this year to 3.6%, down from 4.1% in the German government’s previous forecast at the end of October. Economy Minister Robert Habeck told parliament on Friday that he expects growth of 2.3% in 2023.

The performance of the first quarter will be “inhibited, above all because of the corona pandemic and the restrictive measures but of course also because of the foreign policy situation – times of crisis are often times when the investment climate suffers” , Habeck said, alluding to tensions with Russia over Ukraine. “We expect the pre-crisis level to be reached in the second quarter of this year.”

political cartoons

Germany is currently experiencing another spike in COVID-19 infections fueled by the highly contagious omicron variant.

However, on Tuesday, a closely watched survey showed that business confidence unexpectedly rebounded in January after a six-month decline.

This increase came on the back of a significant improvement in managers’ outlook for the next six months, even as their assessment of the current situation has deteriorated.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


About Author

Comments are closed.