The German economy grew 2.7 percent last year but remained well below pre-pandemic levels, after growth slowed sharply in the fourth quarter due to the impact of the coronavirus crisis and supply chain bottlenecks.

The initial estimates published by the Federal Statistical Office today indicated that Europe’s largest economy came close to stagnating in the final quarter of last year, although it did not publish a quarterly estimate. It also raised its estimate for 2020, when it said the economy contracted 4.6 percent.

Georg Thiel, president of Destatis, said German gross domestic product remained 2 per cent below pre-pandemic levels. “Despite the ongoing pandemic situation and increasing supply and material bottlenecks, the German economy was able to recover after the slump in the previous year, although economic output has not yet reached the pre-crisis level,” he said.

Germany’s vast manufacturing sector has been hamstrung for months by supply chain delays and shortages of key materials such as semiconductors. Its larger services sector is also being hampered by new restrictions to contain a surge in coronavirus infections.

“The final quarter of 2021 was probably weak, given necessary restrictions in contact tintense services and production difficulties in manufacturing due to persistent supply bottlenecks,” the German finance ministry said in a statement.