Omicron leaves Germany on brink of recession as growth dips

The risk of recession is looming for Germany after Europe's biggest economy shrank at the end of 2021 and as it faces a bumpy start to this year, with the rapid spread of COVID-19's omicron variant deterring people from shopping and travel and supply bottlenecks holding back manufacturers.

Output in Germany fell by between 0.5% and 1% in the fourth quarter, the state statistics agency Destatis said Friday.

Forecasts are also shaky for the first three months of 2022, and two straight quarters of falling output would leave Germany in recession, according to one commonly used definition.

Germany helps set the pace for the entire eurozone, the 19 European Union countries that use the euro currency.

Many German companies have suppliers or factories in other European countries, so Germany's business activity can boost growth for its neighbours.

For all of last year, the German economy grew 2.7%, rebounding from a plunge of 4.6% in 2020 when pandemic lockdowns were at their most severe.

Growth remains 2 percentage points below its pre-pandemic level and lags the estimated eurozone figure of 5%.

Complete statistics for the fourth quarter will be released on Jan. 28.

A lag in gathering numbers at the end of the year means the figure for the full year is available before the one for the last three months of the year.