Container port in Hamburg (archive photo)
Photo: Fabian Matzerath / dpa
The German economy is currently unable to withstand the fierce headwind and is losing momentum, according to the German Institute for Economic Research (DIW).
"Economic output in Germany is likely to shrink slightly towards the end of 2021," explained the Berlin economic researchers.
Your economic barometer slumped for the fourth quarter to the lowest value since the second quarter of 2020.
"The delivery bottlenecks persist and also cut back industrial production in the final quarter," explained DIW expert Simon Junker. "In addition, the concerns in connection with the fourth corona wave have increased sharply and are again affecting many contact-intensive service providers, such as the hospitality industry." In addition, the new virus variant Omikron clouded hope for a quick improvement.
Nevertheless, the economic damage will probably not be as devastating as last winter - thanks to the vaccinations and because many companies have adjusted to business operations under pandemic conditions. "However, the risk of noticeable setbacks increases every day as the infection rate spreads," warned the DIW. The new Corona winter should also leave its mark on the labor market and noticeably slow down the increase in employment. The recent rapid reduction in short-time work could come to a standstill for the time being.
According to the DIW, a shortage of many goods is temporarily fueling inflation.
The rate will remain at around five percent until the end of 2021, but the price pressure will already subside at the turn of the year.
Expensive energy and some special effects drove inflation above the five percent mark for the first time in almost 30 years: goods and services cost 5.2 percent more than a year ago.
"Have to expect stagnation in the fourth quarter"
The President of the Ifo Institute, Clemens Fuest, also sees the economic recovery at risk from the fourth corona wave in Germany.
"The situation is having a significant impact on economic development," Fuest told SPIEGEL.
"People consume less, stay away from events or cancel their restaurant visits." The forecast of economic growth of 2.4 percent this year, which the leading research institutes made in the fall, is therefore no longer realistic.
"We must now expect stagnation in the fourth quarter," said Fuest.
Economics Monika Schnitzer also said that the Economic Advisory Board's forecasts for economic growth of 2.7 percent this year and 4.6 percent next year would have to be weakened somewhat.
The reason is that due to the high number of corona infections, new restrictions such as 2G or 2G + are likely to come.
"We assume there won't be a full lockdown," said Schnitzer.
The new Corona variant Omikron should not become an "economic killer".
The pre-crisis level will probably not be reached again in the first quarter of 2022, as previously expected, said Monika Schnitzer.
"That could be postponed into the second quarter."
mamk / mmq / Reuters