German GDP slumps but optimism up as vaccinations increase
Germany’s economy has contracted more than expected in the first quarter amid coronavirus lockdown measures
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Germany's economy contracted more than expected in the first quarter amid coronavirus lockdown measures, according to statistics released Tuesday, but a leading indicator showed that businesses' optimism is rising as the pace of vaccinations increases.
The Federal Statistical Office said that the first quarter gross domestic product in Germany, Europe s largest economy, dropped by 1.8% over the fourth quarter of 2020, according to figures adjusted for price, seasonal and calendar factors. The office's preliminary estimate had been a drop of 1.7%.
GDP was down 3.4% over the same quarter last year, when the pandemic was just starting to take hold, according to price adjusted figures, and 3.1% when adjusted for both price and calendar factors.
Many facets of the economy were shut down in the first quarter of 2021 as Germany grappled with rising coronavirus infection figures.
The country has recently been gradually moving to open up more areas of public life, however, as the latest wave of virus infections subsides and its vaccination campaign gathers pace.
According to the closely-watched monthly survey from Munich s Ifo institute, sentiment among German managers has followed with a considerable improvement.
The agency's index of business climate rose to 99.2 points in May from 96.6 points in April, its highest value since May 2019.
According to its sub indices, companies were more satisfied with their current business situations as well as more optimistic for the coming months, Ifo said.
“The finally accelerating vaccination rollout, as well as first steps in the reopening of the economy, have clearly boosted optimism,” ING economist Carsten Brzeski said.
He cautioned that new variants of the coronavirus could cause a setback, and that supply chain disruptions could harm the manufacturing sector, but that the “general outlook for the German economy is improving.”
“We expect private consumption and the construction sector to be the main drivers of growth in the second quarter,” he said.