The Deutsche Bundesbank (German Federal Bank) has said that Germany may have entered its second recession since the pandemic began, as the omicron form caused record infections that slowed activity.
The central bank predicted Monday in its monthly report that output in Europe’s largest economy may fall “noticeably” in the first quarter, after falling by 0.7 percent in the final three months of 2021.
“In contrast to previous waves of the pandemic, it’s not just the services sector that’s hit by restrictions and adapted behavior,” the Bundesbank said.
Also read | Covid risk ‘dramatically reduced’ but world may face another pandemic: Bill Gates
Pandemic-related absences by workers will “markedly” hit activity in other areas too.
However, the rebound could be quick. According to a business survey released earlier Monday, private-sector activity grew at its quickest rate in six months in February, with manufacturers reporting fewer supply constraints.
According to the Bundesbank research, the economy should bounce significantly in the spring due to “extremely solid” demand, as long as supply-chain pressures ease further and the epidemic continues to retreat.
The Deutsche Bundesbank, literally “German Federal Bank”, is the central bank of the Federal Republic of Germany and, as such, is part of the European System of Central Banks.
Germany is nearing the end of its most recent viral outbreak, which has proven to be less deadly than earlier rounds.
Because the government has decided to gradually relax limitations on public life, the economic loss may be temporary.
(With inputs from agencies)
