German economy shrank less in Q4 than reported: official data

BERLIN - Agence France-Presse

Germany’s economy shrank at a smaller rate in the fourth quarter of last year than originally thought, despite the blows leveled by supply chain woes and the pandemic, official data showed on Feb. 25.

Gross domestic product in Europe’s top economy slipped 0.3 percent in the last three months of 2021 compared to the previous quarter, the federal statistics office Destatis said.

Destatis had in January reported a drop of 0.7 percent in the quarter-on-quarter comparison.

Fourth-quarter growth came in 1.8 percent higher than the previous year.

A lack of raw materials and components hammered industry, particularly the automotive sector which saw a 10.1 percent drop in sales in 2021, as a lack of semiconductor chips temporarily shuttered many factories.

A surge in energy prices, notably for gas and petrol, also weighed on manufacturing.

Meanwhile, government restrictions to blunt the fourth wave of the coronavirus outbreak muted demand for services and at retail outlets.

Germany plans to lift most of its pandemic rules in March, which economists expect will help first-quarter growth to recover, but perhaps not enough to avert a technical recession, the Bundesbank central bank said this week.

A recession is defined as two consecutive quarters of economic contraction.

And a prospective spring rebound may be thwarted by Russia’s invasion of Ukraine and heavy Western sanctions imposed on Moscow.