Germany’s Bundesbank eyes Q4 hit, to focus more on climate policy

Frankfurt, Jan. 25 (BNA): The German central bank said on Monday that the German economy almost certainly suffered in the last quarter of 2021 due to renewed restrictions from the coronavirus.

German news agency dpa reported that the central bank wrote in its monthly report for January: “Germany’s real GDP is likely to have declined somewhat in the last quarter of 2021.”

Restrictions imposed on the fight against Covid-19 would “partly overburden economic activity in the service sector, particularly in December”. It added that bottlenecks in supplies and materials also affected the recovery.

According to preliminary estimates, the Federal Statistical Office expects economic output in Europe’s largest economy to contract 0.5% to 1.0% in the fourth quarter of 2021 compared to the previous quarter.

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

For 2021 as a whole, it calculated 2.7% growth for Germany based on preliminary data.

The Bundesbank report said it also intends to focus more on the climate going forward.

“Climate change and climate policy affect overall economic development and can affect price and financial stability. This can make it difficult to accomplish the tasks of the central bank,” she said.

“For example, physical risks such as an increase in average temperatures or a buildup of extreme weather events could dampen potential macroeconomic growth in the long run.”

MI