German 1Q 2021 Flash GDP Down 1.7% Q/Q, -3.0% Y/Y

30 April 2021

By David Barwick – FRANKFURT (Econostream) – German economic output fell a real, seasonally and calendar-adjusted 1.7% on the quarter in the first quarter of 2021, the German Federal Statistical Office announced on Friday.

The contraction followed growth of 8.7% in 3Q 2020 and 0.5% in 4Q 2020 (each revised up by 0.2 point) and is attributable to the resurgence of the pandemic and the associated containment measures. ‘This affected household consumption in particular, while exports of goods supported the economy’, the Statistical Office said.

On an annual basis, 1Q GDP was down a real 3.3% and a real, calendar-adjusted 3.0%. The Statistical Office said that versus 4Q 2019, the last full quarter before the outbreak of the pandemic, GDP in 1Q 2021 was down 4.9%.

A month ago, European Central Bank Governing Council member and German Bundesbank President Jens Weidmann voiced concern over the near-term growth outlook.

‘Containment measures over the past few months have been stricter than anticipated and they will likely stay so in the near future’, he said. ‘This has reduced the likelihood that the growth rate of 3% projected in December can still be achieved this year.’

‘But then growth would be higher next year’, he said. ‘From today's perspective, the medium-term economic outlook is not fundamentally in doubt.’

Last December, the Bundesbank projected real, calendar-adjusted growth of 3.0% this year, 4.5% in 2022 and 1.8% in 2023.

Detailed results of German 1Q GDP will become available on May 25.