The German economy is likely to shrink sharply in the first quarter of 2021, Bundesbank said in its monthly report, on Monday.

The central bank cautioned that service sector activity is set to drop sharply again due to the Covid-19 containment measures. Experts assumed that in addition to Covid-19 related measures, the higher VAT rates since the beginning of the year also played a role.

The central bank noted that industrial output decreased slightly at the start of the year but export increased.

The material has been provided by InstaForex Company – www.instaforex.com

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