Despite delivery bottlenecks, the German economy grew in the third quarter. Gross domestic product (GDP) increased by 1.8% compared to the previous quarter, as the Federal Statistical Office announced on Friday in a first estimate.
According to the latest figures, Europe’s largest economy even grew 1.9% in the second quarter. However, gross domestic product is still in the red in a pre-crisis comparison. Compared to the fourth quarter of 2019, the period before the onset of the Corona crisis, GDP in the third quarter of 2021 was 1.1% lower.
According to reports, economic growth during the period from July to the end of September was mainly driven by consumer spending. Restrictions to tackle the corona pandemic with the temporary closure of restaurants, fitness studios and stores had been gradually eased from mid-May.
The industry, on the other hand, is suffering from a shortage of materials and delivery bottlenecks, which are a consequence of the Corona 2020 crisis. Last year, demand initially slumped, but global demand is picking up as the economy picks up. Raw materials and intermediate products such as semiconductors are scarce and significantly more expensive. Despite well-filled order books, some companies have to reduce their production as a result. The federal government and economists expect the economic recovery to slow significantly towards the end of the year.
No hope of “final squirt”
This year, given current supply bottlenecks and high energy prices around the world, the hoped-for ‘final burst’ will not happen, said Minister of the Economy Peter Altmaier recently. (CDU). He spoke of a historically unique shortage of intermediate goods. The federal government has lowered growth expectations for 2021. Following the collapse of the krone-related gross domestic product in 2020, the government expects economic output to increase 2.6% this year – in April, an increase of 3.5% was expected. Economic growth of 4.1% is now expected for 2022 instead of the previous 3.6%.
Major economic research institutes have also significantly lowered their economic forecasts for this year. They expect economic growth of 2.4 percent in Europe’s largest economy.