After the significant slump in the German economy in the first year of Corona, the figures for 2021 are already pointing to a recovery. But the pre-crisis level has not yet been reached.
Gross domestic product increased by 2.7 percent in 2021 compared to the previous year. The Federal Statistical Office published the figures on Friday. The office did not see a final spurt at the end of the year. On the contrary: In the fourth quarter of 2021, the economy shrank compared to the previous quarter.
The pre-crisis level has not yet been reached again, said Georg Thiel, President of the Federal Statistical Office. Compared to 2019, the year before the start of the corona pandemic, GDP in 2021 was 2.0 percent lower.
These are preliminary annual results on the development of the German economy and current results on the overall economic situation in the past year, the second year of Corona. In 2020, the first year marked by the global corona pandemic, German GDP collapsed by 4.9 percent after price, seasonal and calendar adjustment.
At the same time, the Federal Statistical Office announced that the German state spent significantly more money than it took in in the second year of the pandemic. In relation to the total economic output, the deficit of the federal, state, local and social security funds was 4.3 percent in 2021.
“Overall, the economic recovery in 2021 was weaker than we – and many others – had forecast at the beginning of last year,” said Sebastian Dullien, scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation. The reason for this is the wave of infections since the fall, which is slowing down consumption and leading to problems in supply chains worldwide.
This will also affect the first quarter of 2022. After that, however, a significant recovery could begin. “Overall, the chances are very good that the German economy will grow much faster in 2022 than in 2021,” said Dullien.
The Bundesbank also expects that the mood to buy will increase again from spring and that people in Germany will spend even more money for a while than before the pandemic. The coffers of many households are well filled, for example because trips had to be canceled and leisure activities were temporarily restricted.
Economists also assume that companies will invest more again from spring, when there is less uncertainty about the further course of the pandemic. In 2022, economists expect the German economy to achieve comparatively strong growth of between 3.5 percent and a good 4 percent.