German economy is slumping on anti-virus curbs, Bundesbank says

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The German economy is likely to shrink sharply this quarter as pandemic-fighting curbs hit the services sector and even the booming construction industry slows, the Bundesbank said on Monday.

In its latest monthly report, the German central bank seemed to abandon its expectations of a rebound in the spring and dropped references to the vaccination campaign, which has been plagued by delivery delays and news reports of possible side-effects, as a catalyst.

It added that an increase in sales tax, which had been temporarily cut last year, had probably contributed to a substantial decline in construction in January.

 

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