Germany's Bundesbank Eyes 4th Qtr Hit, To Focus More On Climate Change

The German economy almost certainly suffered in the last quarter of 2021 due to renewed coronavirus restrictions, the country's Bundesbank said Monday, Jan. 24, 2022, Deutsche Presse-Agentur (dpa) reported.

Photo Insert: Bundesbank is the central bank of Germany

"Germany's real gross domestic product (GDP) is likely to have fallen somewhat in the final quarter of 2021," the central bank wrote in its monthly report for January. Restrictions in the fight against COVID-19 would have "in part significantly burdened economic activity in the service sector, particularly in December." Supply and material bottlenecks also dampened the recovery, it added.

According to initial estimates, the Federal Statistics Office expects economic output in Europe's largest economy to have contracted by 0.5 percent to 1.0 percent in the fourth quarter of 2021 compared with the previous quarter.

The Wiesbaden-based office plans to announce the first official data for the last three months of 2021 this Friday.

For 2021 as a whole, it had calculated growth of 2.7 percent for Germany based on preliminary data. The Bundesbank report said it also intends to focus more on the climate in future.

"Climate change and climate policy influence overall economic development and can affect price and financial stability. This can make it more difficult to fulfill central bank tasks," it said.

"For example, physical risks such as the rise in average temperatures or the accumulation of extreme weather events can weaken macroeconomic potential growth in the long term."

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