German economy grew by 2.7% in 2021 as country tackled supply chain issues, surging Covid cases

German economy grew by 2.7% in 2021 as country tackled supply chain issues, surging Covid cases

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A sign showing entry only for “2G,” the term in Germany for people who are either vaccinated against or have recently recovered from Covid-19.
Jens Schlueter | Getty Images

The German economy grew by 2.7% in 2021 after another year of surging Covid-19 cases, pandemic-related restrictions and supply chain pressures, preliminary data showed Friday.

It comes after the largest euro economy shrunk by 4.6% in 2020 — the first year of full lockdowns and tough social restrictions in the wake of Covid.

“Despite the continuing pandemic situation, more delivery bottlenecks and material shortages, the German economy managed to recover from the sharp fall last year although the economic performance has not yet reached its pre-crisis level again,” Georg Thiel, president of the Federal Statistical Office said Friday, according to a statement.

The statistics office said that German growth was still 2% lower in 2021 than in 2019, showing that the economy has not yet returned to pre-Covid levels.

Looking ahead, upcoming economic performance remains clouded by uncertainty.

On Thursday, Germany’s public health agency, the Robert Koch Institute, warned that the number of new Covid cases is continuing to increase rapidly. The latest figures point to new daily infections of around 80,000 people.

Higher deficit

In addition, Germany saw an increase in net borrowing in 2021.

The statistics office said that financial deficit stood at 153.9 billion euros ($176.46 billion) at the end of the year — higher than the 145.2 billion euros recorded in the previous year.

This is a breaking news story and it is being updated.

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