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German Economy Contracts Amid Virus Curbs, Supply Snags

  • Economy shrinks 0.7% in fourth quarter; median est. -0.3%
  • Challenging near-term outlook raises risk of recession
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Germany’s economy shrank 0.7% in the fourth quarter with consumers spooked by another wave of Covid-19 infections and factories reeling from supply-chain problems. 

The figures reported by the nation’s statistics office are in line with an earlier estimate, but missed expectations by economists for a contraction of 0.3%. With no easing of coronavirus restrictions in sight and manufacturing constraints only starting to ease, Europe’s largest economy risks falling into its second recession of the pandemic.