Germany cuts 2022 GDP growth forecast

The German government on Wednesday lowered its economic growth forecast for 2022 as an Omicron-fuelled surge in coronavirus cases holds back Europe's industrial powerhouse.

The country's gross domestic product is now estimated to expand by 3.6 per cent, down from 4.1 per cent in a previous forecast. The start of the year  "will still be subdued due to the coronavirus pandemic, especially in the service sectors", the economy ministry said in a report.

But the bounce-back in Europe's biggest economy should  "noticeably" pick up pace once infections level off and global supply chain frictions  "gradually" ease over the course of 2022.

The ministry's forecast is more pessimistic than that of the Bundesbank central bank, which is pencilling in 4.2 per cent growth this year.