In Great Britain, for the first time, GDP exceeded pre-pandemic levels, in Germany it was not, and still 2% lower than in 2019. More specifically, the British gross domestic product in November 2021 grew by 0, 9% on a monthly basis and 8% on an annual basis and was 0.7% higher than that of February 2020, before Covid-19 spread. In October, the economic recovery had slowed to 0.2%, indicating near stagnation. “It is wonderful to see the economy returning to pre-pandemic levels in November: it is a sign of the grit and determination of the British people”, commented the chancellor of the exchequer, Rishi Sunak.
The government, he continued, “will continue to support the economy, with subsidies, loans and tax breaks for businesses and with our job plan which is ensuring that people in the country have fantastic opportunities.” Britain’s industrial production also recovered solidly in November. It grew 1.1% on a monthly basis, which was above expectations. In October it had recorded a -0.1% on a monthly basis. On an annual basis, in November the increase was 0.4%.
An enthusiasm mitigated by the observations of some economists who point out that these data refer to the period immediately preceding the arrival in Great Britain of the Omicron variant. “Sure, it’s a good thing that economic growth peaked in November, but the data is outstripped by events,” CBI chief economist Alpesh Paleja told the Guardian. “It is very likely,” he added, “that the business took a hit in December, with the spread of the Omicron variant and consequent restrictions that halted operations in some sectors.” Furthermore, “with the arrival of the new year, the forecast is overshadowed by further challenges: the shortage of work exacerbated by sick leave, the
bottle in the supply chain and the rising cost of living for families “.
Also for Paul Dales, British chief economist of Capital Economics, quoted by the Mf-DowJones agency, the British GDP is destined to a temporary setback due to Omicron. “Performance was impressive in November, but tightening restrictions, staff absences due to illness or isolation and increased consumer caution are likely to have affected the business,” according to the economist. However, recent signs that the Omicron wave is starting to subside “suggest that GDP will likely rebound in February and March,” Dales predicted. From 1 April, a sharp rise in taxes and utility prices should drive the recovery for the rest of the year, the expert concluded.
In short, with the growth of the British GDP rebounded in November, with a considerable force on a large scale in industry, services and construction, while we are witnessing a slowdown linked to the Omicron variant at the end of the year, “inflation high should lead to another BoE interest rate hike in February, ā€¯Morgan Stanley said. Consequently, the 10-year Gilt yield rises to 1.1390% against 1.111% yesterday.
By contrast, Germany’s gross domestic product in 2021 grew “only” by 2.7%. “Economic development has been highly dependent on Covid-19 infection rates and related preventive measures,” explained Destatis president Georg Thiel. “Despite the continued pandemic situation, several bottlenecks in the supply chain and several material shortages, the German economy has managed to recover from last year’s sharp fall, although economic performance has not yet reached pre-crisis levels,” he said. Thiel indicated, stating that German GDP is still 2% lower than in 2019, before the arrival of Covid-19. In 2020 it had dropped by 4.6%.
Now Pantheon Macroeconomics, cited by the MF-DowJones agency, predicts that the German economy will slow down or even contract in early 2022 as the return of restrictions to combat the spread of the Omicron variant of the coronavirus will continue to weigh on business. For the first quarter Pantheon expects a marginal expansion of 0.1% compared to the previous quarter. “The good news is that we expect GDP to pick up in the second quarter, which should ensure the economy grows 3% this year,” Pantheon said. Instead, for Capital Economics it will increase by about 3.5% this year. Germany “lagged behind many of its peers,” including the US, France and the UK, Capital Economics noted. A weakness in the German recovery due to the struggling automotive sector, where production was 30% below 2019 levels during the first eleven months of 2021. Furthermore, the hospitality sector was held back by government restrictions and consumer caution throughout the year. The outlook for 2022, therefore, still largely depends on the pandemic and supply chain problems. (All rights reserved) they still largely depend on the pandemic and supply chain problems. (All rights reserved) they still largely depend on the pandemic and supply chain problems. (All rights reserved)

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