The Bundesbank said the German economy may be in a technical recession due to the latest wave of the coronavirus pandemic before the recovery begins in the second quarter of this year.
Frankfurt-based Bundesbank reported that economic performance will decline significantly again in the first three months of the year, after a 0.7 percent drop in gross domestic product in the last quarter of 2021. According to the monthly report, after that, growth will accelerate again in spring.
As he wrote, the decline is mainly due to the epidemiological restrictions, as official measures have been taken to slow the spread of the virus. Certain sectors of the service sector have been hit hard..
In addition, the manufacturing sector continues to face serious problems due to a shortage of labour, raw materials and components. At the same time, the central bank emphasized that the rise in industrial production indicated a certain amount of loosening in the supply situation at the end of last year.
Economics treats two consecutive quarterly drops in GDP as technical recessions.
Germany, Europe’s largest economy, posted a GDP growth of 2.8% last year, but many of its neighbors outperformed France in the post-crisis period, with France, for example, expanding by 7%.
The Berlin government recently announced that restrictions will soon be eased as infection rates improve. Under those plans, most measures will be lifted by the end of March.
Manufactured using AFP reports.
