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German economy suffers from Omicron – gross domestic product falls


Economic output in Germany fell by 0.7 percent in the fourth quarter of 2021. France's economy, on the other hand, grew more strongly in the same period than it had since 1969 - despite the pandemic.

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Photo: Daniel Bockwoldt / dpa

The corona pandemic slowed down the economy in Germany significantly at the end of 2021.

Between October and December, the economy shrank by 0.7 percent, adjusted for price and seasonal effects, compared to the third quarter of 2021, according to the Federal Statistical Office.

Economists had only expected a minus of 0.3 percent.

However, the delta wave before Christmas and the new omicron variant emerging in the fourth quarter and the associated restrictions weighed more heavily on the German economy than expected.

After economic output grew again in the summer despite increasing supply and material bottlenecks, the recovery stopped at the end of the year.

Private consumption in particular decreased in the fourth quarter of 2021 compared to the previous quarter, while government consumer spending increased.

Construction investments fell compared to the third quarter of 2021.

After all, according to the Federal Statistical Office, economic output for the full year 2021 was slightly better than the previously forecast 2.7 percent with an increase of 2.8 percent.

In contrast to Germany, the economy in France grew surprisingly strongly in the fourth quarter of 2021, despite the Omicron wave at the end of 2021 - and grew more strongly for the year as a whole than it has in 52 years.

The gross domestic product (GDP) rose by 0.7 percent from October to December compared to the previous quarter, as reported by the national statistics office Insee.

Economists had only expected an increase of 0.5 percent for France, after a GDP increase of 3.1 percent in the summer.

In 2021 as a whole, the economy grew by 7.0 percent - and thus more strongly than at any time since 1969.

However, the economy also collapsed by 8.0 percent in the Corona recession year 2020.

In the second half of 2021, progress in the vaccination campaign and relaxation of the corona measures in particular boosted the economy.

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Source: spiegel

All business articles on 2022-01-28

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