The German economy is likely to shrink again in the current quarter, as a new wave of coronavirus outbreaks prevents many people from going to work, the Bundesbank announced on Monday, predicting a recovery in the spring.
Europe’s largest economy followed a negative trend in the last three months of 2021, as its large industrial sector was hit by supply problems.
These now seem to be easing but the rapid spread of Omicron has affected services and employment in general.
“Unlike previous waves of pandemics, it is not just service activity that is likely to be affected by restraint measures and behavioral changes,” the German central bank said in its monthly report.
“On the contrary, being absent from work due to a pandemic is likely to hit economic activity significantly in other areas as well,” he added.
The Bundesbank stressed that German industry is offering “a positive boost” to the economy thanks to easing supply problems and high demand, setting the stage for a spring recovery if the pandemic subsides.
Source: Capital
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