Supply bottlenecks slow the German recovery

Photo: EPA

The largest EU economy posted a growth in the second quarter of this year but still missed the target set by analysts' forecasts. The supply chains bottlenecks are the main factor behind the slower rebound from the recession caused by pandemic, Reuters reported. The German economy accelerated by 1.5% quarter on quarter. That result comes after a revised contraction of 2.1% in the first quarter, and by 9.2% on annual basis, the Federal Statistics Office said.

Analysts expected forecast increases of 2.0% and 9.6% respectively.

Compared with the fourth quarter of 2019, the last pre-pandemic period, GDP was still down 3.4%, the Statistics Office said. Supply chain worries and rising coronavirus infections have dampened the outlook for the economy. German business morale fell unexpectedly in July, the first decline since January. After more than two months of steady decline, Covid-19 cases have been rising since early July, due mainly to the spread of the more infectious Delta variant. Roughly 60% of Germany's 83 million people have had a first shot of a Covid-19 vaccine and just over half are fully vaccinated.

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