Bottlenecks weigh on German third quarter growth
Bottlenecks weigh on German third quarter growth
BERLIN (AFP) - Germany’s economy grew by just 1.8 percent in the third quarter of 2021, less than analysts had expected amid continued supply chain disruptions and material shortages, first official estimates showed on Friday.
"The recovery of the German economy continued over the summer" driven mainly by consumer spending, federal statistics agency Destatis said, also revising upwards its growth figure for the second quarter to 1.9 percent.
Factset analysts had predicted a third-quarter rebound of 2.2 percent in Europe’s top economy, after it contracted earlier in the year as a result of restrictions imposed to curb the Covid-19 pandemic.
But supply chain bottlenecks and lack of raw materials, including plastics, metals and paper, have choked off the recovery from the impact of the pandemic.
As a result, the government on Wednesday lowered its forecast for economic growth in 2021 to 2.6 percent, from 3.5 percent previously.
The economic recovery is now expected to be pushed into next year, with the government forecasting growth of 4.1 percent, up from its previous estimate of 3.6 percent.
German GDP in July to September remained 1.1 percent below its level in the last quarter of 2019, before the coronavirus struck.
To add to the country’s woes, inflation accelerated for the fourth month in a row in October, reaching 4.5 percent, with energy prices soaring by 18.6 percent.
However, Jens-Oliver Niklasch, a senior economist at LBBW bank, said that "all in all, we are still on the road to recovery".
"We have now seen two quite strong quarters in a row," he said, while cautioning that "the supply chain issue remains with us, and high inflation is also weighing on consumer demand".
