German Economy Contracts In Q1
Germany's economy contracted in the first quarter due to the
coronavirus pandemic after recovering slightly in the second half
of 2020, data published by Destatis revealed on Friday.
Gross domestic product fell 1.7 percent sequentially, in
contrast to the 0.5 percent growth seen in the fourth quarter of
2020. This was bigger than the economists' forecast of -1.5
GDP, on an unadjusted basis, declined at a faster pace of 3.3
percent annually in the first quarter after easing 2.3 percent in
the previous quarter. Economists had forecast an annual fall of 3.6
Meanwhile, the decline in calendar-adjusted GDP slowed to 3
percent from 3.3 percent.
Compared with the fourth quarter of 2019, the quarter before the
coronavirus crisis began, GDP was 4.9 percent lower in the first
quarter of 2021.
Destatis said the pandemic has affected household consumption in
particular, while exports of goods supported the economy.
A growth engine in the final quarter, the economy has become a
drag on the entire Eurozone, Carsten Brzeski, an ING economist
said. But not for too long.
Technical factors such as the reversal of stockpiling ahead of
Brexit at the end of last year, the impact of the harsh winter
weather on the construction sector, and supply chain disruptions
have significantly blurred German GDP data in the first quarter,
the economist noted.
Eurozone first quarter GDP data is due today. Economists expect
the currency bloc to shrink 0.8 percent sequentially after falling
0.7 percent in the fourth quarter of 2020.