German Economy Grew By 2.7% In 2021 After 4.6% Contraction In 2020 , Economic Output Still A Full 2% Below 2019 Pre-Pandemic Level
The German economy grew by 2.7 percent in 2021 but still remained 2.0% percent lower in 2021 than pre-pandemic level in 2019, the year before the Covid-19 crisis began, the country's statistical said today (Jan 14).
The German economy grew by 2.7 percent in 2021 but the economic output still remained a full 2.0% percent lower that pre-pandemic level in 2019, the country's statistical said today (Jan 14).
“Despite the continuing pandemic situation, more delivery bottlenecks and material shortages, the German economy managed to recover from the sharp fall last year although the economic performance has not yet reached its pre-crisis level again,“ said Dr. Georg Thiel, President of the country's Federal Statistical Office, at the press conference on the gross domestic product 2021 in Wiesbaden.
The 2.1% GDP growth for the whole year is likely to masked the sharped deceleration in the last quarter of 2021. The final, fourth quarter numbers will be released by Statistical Office on 28 January 2022
Germany's export-reliant and manufacturing-centric economy has been hit by the supply chain issues and pandemic-induced restrictions.
In contrast to 2020 when the pandemic-hit economy contracted sharply by -4.9 percent, economic output increased across sectors in 2021.
While manufacturing rose markedly by 4.4% in 2021 over the previous year, business services including research and development as well as legal, tax consultancy and engineering activities, was up by 5.4%.
Trade, transport, accommodation and food services grew by a relatively muted 3% due to the continuing pandemic restrictions.
Economic output still below 2021
Despite the growth in 2021, the economic output has not yet recovered to pre-crisis levels in most economic sectors.
Economic performance in manufacturing, for instance, was still 6.0% below the level of 2019 in 2021. Services were hit particularly hard by the continuing Covid-19 pandemic and price-adjusted value added was 9.9% below the pre-crisis level in 2021. Construction as well as information and communication were able to sustain their positions during the pandemic and considerably increase their economic performance compared with 2019.
The statistical office also said that Covid-19 pandemic led to high fiscal deficit for the German government, both at federal and state level.
The consolidated financial deficit stood at 153.9 billion euros ($176.46 billion) at the end of the year — higher than the 145.2 billion euros recorded in the previous year.
2022 Growth Prospects
The county's economic performance remains clouded by uncertainty with rising infections and supply chain bottlenecks.
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