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Monday, March 27, 2023

German Economy Shrank 0.7 Percent in 4th Quarter as COVID-19 Resurged

BERLIN—The German economy shrank by 0.7 percent in last year’s fourth quarter amid a resurgence in coronavirus infections and new restrictions, official figures showed Friday.

The quarter-on-quarter decline reported by the Federal Statistical Office followed two quarters of solid gains that came despite persistent supply bottlenecks.

Gross domestic product grew 2.8 percent over the whole of last year, the office said, rebounding from a plunge of 4.6 percent in 2020 when pandemic lockdowns were at their most severe. That figure was revised up slightly from the preliminary figure of 2.7 percent the office reported earlier this month.

The government this week cut its growth forecast for this year to 3.6 percent, down from the 4.1 percent Germany’s previous government forecast in late October. Economy Minister Robert Habeck told parliament on Friday that it expects 2.3 percent growth in 2023.

The first-quarter performance 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 in which the investment climate suffers,” Habeck said, alluding to tensions with Russia over Ukraine. “We expect that the pre-crisis level will be reached in this year’s second quarter.”

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

However, on Tuesday, a closely watched survey showed business confidence unexpectedly picking up in January after a six-month slide.

That increase came thanks to a significant improvement in managers’ outlook for the next six months, even as their assessment of the current situation worsened.



World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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