Bundesbank: German Economy Slumping on Anti-Virus Curbs

Germany’s economy is likely to contract sharply this quarter, as the service sector is hit by pandemic restrictions as the slowdown extends to a booming construction sector, the Bundesbank said on Monday.

In its most recent monthly report, the central bank appears to have abandoned its expectations for a spring recovery and overlooked citing the vaccination campaign as a catalyst at a time when it is experiencing difficulties due to delayed deliveries and reports of potential side effects.

“The measures to contain the pandemic are more stringent on average in the current quarter than in the previous one,” the Bundesbank said. “Therefore, the economic output in the first quarter of 2021 is likely to decline sharply … particularly in the contact-intensive service sectors.”