The German economy contracted in the fourth quarter, but less than initially estimated

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Germany’s economy contracted in the fourth quarter of 2021 due to a rise in Covid-19 cases and the resulting reimposition of restrictions, according to a second estimate released by Germany’s Federal Statistical Office on Friday.

Gross domestic product fell 0.3% adjusted from the previous quarter, Destatis said. The contraction was lower than the 0.7% decline in the first estimate and economists’ expectations of a 0.7% decline in a Wall Street Journal survey.

GDP rose 1.8% year-on-year in the fourth quarter on a calendar and price-adjusted basis, more than the 1.4% forecast by economists polled by the Journal.

GDP for the quarter is down 1.1% compared to the fourth quarter of 2019, the quarter before the start of the Covid-19 crisis.

Restrictions imposed during the fourth wave of Covid-19 have dampened household final consumption spending, Destatis said. After two quarters of strong increases, household consumption fell by 1.8% over the quarter in the fourth quarter after adjusting for price, seasonal and calendar variations.

Government final consumption expenditure increased by 1.0%. Gross fixed capital formation in machinery and equipment increased by 0.9% quarter on quarter. Foreign trade increased during the quarter. Exports of goods and services were up 4.8% compared to the third quarter of 2021, after adjusting for prices, seasonal and calendar variations. Total imports rose slightly more, 5.1%, Destatis said.

Write to Maria Martinez at [email protected]

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