BERLIN (WNI) — Germany’s economy suffered a setback in the fourth quarter of 2021 as newly revised figures released on Friday show a worsening contraction of activity.
German GDP is now expected to contract at -0.7% in the 4th quarter vs -0.3% previously. The new preliminary data published on Friday shows German growth numbers underperforming market expectations.
The annualised GDP rate declined in Q4 from 2.5% to 1.4%. Markets had predicted that the revised GDP figure would be 1.8%. Germany’s economic troubles have been caused by numerous factors including the new Omicron virus which has hampered exports and created subdued demand for goods and services in the last quarter of 2021.
In contrast to Germany, France recorded its best year of growth in more than 50 years as its economy rebounded strongly in 2021. However, the French economy is expected to slow down considerably this year according to the latest data released by the IMF, along with most eurozone countries except for Spain.
Despite a slowdown in growth for the European Union’s largest economy, Germany is expected to rebound later in 2022. The economy ministry noted however that demand within the service sectors would “still be subdued due to the coronavirus pandemic”.