German economy shrinks 2% in first quarter (government advisers)


BERLIN (Reuters) – The German government’s council of economic advisers said on Wednesday it expected Europe’s largest economy to contract by around 2% in the first quarter of this year due to the lockdown aimed at containing the COVID-19 pandemic.

The council reduced its forecast for gross domestic product growth for the full year of 2021 to 3.1% from 3.7% previously. He expects the economy to reach its pre-crisis level around the turn of 2021/22 and grow by 4% next year.

“The biggest downside risk remains the development of the coronavirus pandemic. The question of how quickly the economy can return to normal depends mainly on the progress of vaccination, ”the council said in a statement, giving the first official forecasts of the impact in the first three months of the. year.

Economists have warned that a decision by Germany and several other European countries to suspend AstraZeneca’s COVID-19 vaccine could delay progress in achieving herd immunity and postpone a much-hoped-for easing of lockdown measures necessary for a solid recovery in the second quarter.

The European Union’s medicines regulator is investigating reports of blood clots, bleeding and low platelet counts and will report its findings on Thursday. AstraZeneca said a review of the safety data showed no evidence of an increased risk of clots.

Board member Veronika Grimm said the AstraZeneca vaccine was needed to speed up Germany’s already slow vaccination campaign.

For Germany to meet the EU’s target of vaccinating 70% of the adult population by the end of September 2021, authorities must increase the number of daily vaccines given at vaccination centers by 50%, said Grimm .

To achieve this, the AstraZeneca vaccine is needed because it is easier to transport and store than injections which require unusually low temperatures throughout the distribution chain, she added.

“In addition, family physicians and specialists should be included in the vaccination process,” said Grimm.

In the worst-case scenario where injection of AstraZeneca would be permanently banned, it could only be replaced in the government’s vaccination plan partially during the year when other vaccines such as Johnson & Johnson’s should be available, said Grimm.

Reporting by Michael Nienaber, editing by Kirsti Knolle and Alison Williams


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