German GDP declined more than expected in the first quarter

According to the report from the Federal Statistical Office (Destatis), the gross domestic product (GDP) fell by 1.8% in the first quarter of 2021 on the fourth quarter of 2020 after adjustment for price, seasonal and calendar variations. Economists had expected a 1.7% decrease. After the German economy had somewhat recovered in the second half of 2020 (+8.7% in the third quarter and +0.5% in the fourth quarter), the coronavirus crisis caused another decline in economic performance at the beginning of 2021. Destatis reports that the decrease was slightly larger than reported in the first release of 30 April 2021. Compared with the fourth quarter of 2019, the quarter before the corona crisis began, GDP was 5.0% lower.

The continuing, and in part intensified, restrictions imposed to contain the coronavirus pandemic had a particularly marked impact on household final consumption expenditure at the beginning of the year. In the first quarter of 2021, household final consumption expenditure fell by 5.4% on the fourth quarter of 2020 after adjustment for price, seasonal and calendar variations. Government final consumption expenditure was slightly higher than in the previous quarter (+0.2%). Positive contributions came especially from gross fixed capital formation in construction in the first quarter of 2021 as it rose 1.1% on the fourth quarter of 2020 after price, seasonal and calendar adjustment.

In the first quarter of 2021, the price-, seasonally and calendar-adjusted gross value added decreased by 0.8% on the fourth quarter of 2020. 

GDP in the first quarter of 2021 was down a price-adjusted 3.4% compared with the first quarter of 2020. After price and calendar adjustment, the decrease was slightly smaller (-3.1%) as there was one working day less than a year earlier. Economists had expected a 3.0% decrease.