There are a lot of illnesses, but there aren't a lot of raw materials. The German locomotive's GDP declined by 0.7 percent in the fourth quarter of 2021 and may remain negative in the first quarter of the following year.
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| Berlin, Germany |
Germany's nightmare of a recession has returned. After the first EU economy's GDP fell by 0.7 percent in the fourth quarter of 2021, "total economic production might fall sharply again in the first quarter of 2022, before picking up pace in the spring." The Bundesbank, the country's central bank, presented its monthly economic report to shed light on the German locomotive's slowdown.
The Bundesbank blamed the fall in national wealth on pandemic constraints caused by the widespread spread of the Delta and Omicron genotypes in Germany. A pandemic condition that compelled authorities to adopt actions that "heavily impacted several branches of the service sector."
The manufacturing sector, which was less affected by anti-Covid measures, also experienced significant shortages of raw materials and industrial components. A shortfall that has been added to the scarcity of labor, which is now a widespread occurrence throughout the EU, where the all-time high of worker shortage has been reached.
"The return of industrial activity, however, showed a certain easing" of the challenging period by the end of 2021, according to the central bank. Nonetheless, the facts speak for themselves, and because a recession in the economy is defined as two consecutive quarters of economic loss, Germany will formally be in recession if the Bundesbank's estimates are fulfilled.
However, it should be noted that the German economy declined significantly less than that of other Southern European nations during the pandemic's most severe phase. This, together with other variables, has resulted in a greater recovery in the rest of the EU at a time when the German locomotive is faltering. An economic position that has put even greater strain on the Berlin administration, which has stated that it will begin to eliminate health restrictions only when instances begin to drop.