The corona crisis slowed down the German economy less at the end of 2021 than originally assumed.

The gross domestic product (GDP) shrank by 0.3 percent between October and December compared to the previous quarter, as the Federal Statistical Office announced on Friday and thus revised an earlier estimate of minus 0.7 percent.

Last year the economy had grown by a revised 2.9 percent.

However, it was not able to compensate for the slump of 4.6 percent from the first year of the Corona crisis in 2020.

Notably, consumer spending fell 1.8 percent at the end of 2021, while government consumption spending increased 1.0 percent.

Construction investments stagnated in the summer.

It was the first decline in GDP since the first quarter of 2021. Experts assume that the Omicron wave will also weigh on the economy in the current first quarter.

This could lead to a technical recession - if economic power falls for two quarters in a row.

Upswing not yet in sight

So far, there are hardly any signs of an improved economic situation.

"Omicron and supply chains will remain stubborn spoilsports for the time being," said chief economist Alexander Krüger from the private bank Hauck Aufhäuser Lampe.

"For the current quarter, a dynamic return to growth is out of the question."

Economist Jens-Oliver Niklasch from LBBW also expects the economy to be restrained at the start of 2022 - "especially since high inflation is usually a real brake on consumption".

Like most experts, he expects a noticeable revival from spring when the virus pandemic is likely to subside.

The federal government expects economic growth of 3.6 percent for this year and a GDP increase of 2.3 percent for 2023, as Federal Minister of Economics Robert Habeck said in the Bundestag at the end of January.

He spoke of a robust economy and a stable job market.

At the beginning of the year, however, the momentum was still subdued due to the ongoing restrictions to combat the pandemic, according to the Green politician.

The corona pandemic tore less deep holes in the state budget last year than initially assumed.

The deficit of the federal, state, local and social security funds was 3.7 percent in relation to economic output, as the Federal Statistical Office announced on Friday.

In a first calculation, the Wiesbaden authority had put the minus at 4.3 percent.