Germany’s economic system went into reverse on the finish of 2021, as omicron mixed with provide shortages left the commercial powerhouse additional away from returning to its pre-Covid measurement.

The eurozone’s largest economic system expanded by 2.7pc over the 12 months as an entire, official figures confirmed, rebounding solely partially from the 4.6pc decline suffered in 2020.

It means GDP for 2021 as an entire was nonetheless 2pc decrease than it was in 2019 earlier than the pandemic struck.

Official knowledge for the final three months of the 12 months shouldn’t be printed till January however the statistics workplace stated the economic system contracted by between 0.5pc and 1pc in contrast with the third quarter.

Manufacturing facility output climbed 4.4pc within the 12 months after a 10pc drop in 2020. Enterprise companies rebounded by 5.4pc, from a 7.4pc drop. Development shrank in 2021 after a stronger 2020.

The Authorities borrowed €153.9bn, up from €145.2bn in 2020 and the second-highest deficit since reunification.

Carsten Brzeski, an ING analyst, stated provide shortages have crippled companies, whereas omicron is inflicting new issues with workers illness.

No different eurozone nation suffered as a lot because the German economic system amid a collection of provide chain frictions,” he stated.

“Industrial manufacturing has mainly stagnated since spring final 12 months, regardless of richly stuffed order books and really low inventories.”

GDP is assumed to have fallen by a minimum of 0.5pc within the closing three months of the 12 months, placing the economic system behind different superior nations within the rebound from Covid. The US and UK have already returned to their previous measurement and France was virtually there by the tip of September.

Andrew Kenningham at Capital Economics predicts the German economic system will develop by 3.5pc this 12 months if it could possibly comply with the identical path as Britain and US.

“Omicron is certain to maintain shopper expenditure subdued within the close to time period though Germany has not but suffered infections on the dimensions seen elsewhere,” he stated.

“In the meantime, there may be little proof that offer issues are easing in Germany and certainly the statistics workplace stated provide bottlenecks would proceed for some time.”

Stefan Schlibe, an HSBC economist, stated there may be nonetheless room for progress to snap again, with loads of demand for items if firms are in a position to get their merchandise to market.

“We regard it as extremely doubtless that German trade will get better extra strongly, as soon as the bottlenecks ease,” he stated.

“The newest order numbers have been robust once more, firms have by no means been extra constructive concerning the order books and the cabinets are empty.”