FX.co ★ Germany's economy endures hard lockdown

According to Deutsche Welle citing Germany’s Federal Statistical Office, the majority of eurozone countries are now facing a crisis amid the COVID-19 pandemic. Germany is no exception as the third wave and numerous restrictions have delivered a severe blow to the country.

In the first quarter of 2021, the German economy shrank by 1.7%, having an adverse effect on its neighbouring countries. The introduction of a new national lockdown that stalled consumer demand was behind a decline in Germany’s economic performance. Meanwhile, the GDP in the euro area fell by 0.6% in the first three months of the year.

By the end of 2020, Germany’s economy was on its way to recovery. In the third quarter of last year, GDP accelerated by a record 8.7% despite the raging pandemic.

However, the third COVID-19 wave that got a grip on the European Union this March made its own adjustments. As a result, the German economy slowed down due to a spike in coronavirus cases amid the emergence of new virus strains and the sluggish pace of the vaccine rollout.