German economy slumps in last quarter of 2021

Berlin (dpa) – Official figures have confirmed a disappointing contraction for the German economy in the final quarter of last year while the country was struggling with a fourth wave of the coronavirus pandemic.

Gross domestic product shrank by 0.7 per cent in the October to December quarter compared to the previous quarter, according to the Federal Statistical Office on Friday.

The contraction contributed to lower-than-expected GDP growth of 2.8 per cent in 2021 as a whole for Europe’s most important economy, according to the latest data.

This was low compared to many other major European economies, including France, which grew by 7 per cent last year, according to figures also released on Friday.

The German economy is still lagging behind pre-pandemic levels. GDP in the fourth quarter of 2021 was 1.5-per-cent lower than in the same period of 2019 – the last quarter before the coronavirus hit Europe.

Supply bottlenecks in the country’s key manufacturing sector and the continuing impact of coronavirus restrictions are proving to be a severe drag on economic activity.

Although the order books of many companies are full, they cannot be processed at the usual pace due to a shortage of materials.

Officials and experts are forecasting Germany’s economy to pick up speed during the course of 2022, with Economy Minister Robert Habeck describing it earlier this week as a “catch-up phase.”

In 2022 as a whole, the economy is expected to grow between about 3 and 4 per cent, according to the latest forecasts.

The government recently scaled down its estimates and said it expected gross domestic product to increase by 3.6 per cent this year.