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The German government has lowered its forecast for Gross Domestic Product (GDP) growth in 2022, but has predicted that Europe’s largest economy will remain strong and return to pre-pandemic coronavirus levels.
The Ministry of Economy now forecasts growth of 3.6 percent, while at the end of October it would be 4.1 percent. The decline in growth prognosis was influenced by a sudden new spread of coronavirus infections, stimulated by a highly infected omicron species.
The German economy grew by 2.7 percent last year and recovered from a 4.6 percent decline in 2020, when restrictions due to the pandemic were most severe. The government said the projected growth this year would return GDP to pre-crisis levels. The German Bureau of Statistics estimated that GDP fell between 0.5 and 1 percent in the last quarter of last year.
The forecast is not the brightest for the first three months of 2022, as a result of which the German economy may soon enter recession. A recession is considered to be a decline in economic activity for at least two consecutive quarters. However, there is great optimism that the situation will improve over the year. A poll released yesterday showed business optimism rose sharply in January after a six-month slump.
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