German economy up but beer sales down

It looks like good news for Germany's economy, but some experts are cautioning against too much optimism. German breweries are also struggling to share the excitement.

German economic output rose 1.5% during the second quarter of 2021, the Federal Statistical Office reported on

Friday.

Destatis, the German name for the statistics office, attributed the quarter-on-quarter rise in gross domestic product (GDP) to higher household and government spending after many coronavirus restrictions were lifted.

The GDP for the three-month period was up 9.6% compared to the same period in 2020 when Germany went into a hard lockdown, plunging Europe's largest economy into its deepest recession since the 2009 financial crisis.

Will Germany's GDP continue to grow in 2021?

Some analysts see Germany's economy continuing to rebound strongly this year. Economic forecasting institutes are predicting GDP growth of between 3.2% and 3.9%.

Despite the upturn, there are a number of concerns about the health of the country's economic growth.

While up from the first quarter of this year, the second quarter GDP figure fell short of the 2% gain economists had forecast for the period.

Additionally, the economy has not yet returned to its pre-pandemic size.

The statistics office said GDP was still 3.4% lower in the second quarter than it was in the final quarter of 2019 — the last one before the pandemic started.

Some economists pointed to global supply chain bottlenecks, hampering German production. This includes semiconductor shortages that have repeatedly

hit the automotive sector.

There are also fears that the spread of highly contagious delta coronavirus variant could lead to future lockdowns.

What about German beer sales?

While consumer spending had increased, German beer sales showed the lingering impact of coronavirus restrictions.

Sales in this year's first half were 2.7% lower than a year earlier, according to data released by Destatis on Friday.

German-based breweries and distributors sold about 4.2 billion liters (1.1 billion gallons) of beer from January to June, the Federal Statistical Office said. That figure doesn't include alcohol-free beer or beer imported from outside the European Union.

Some 3.3 billion liters of this was sold domestically, 4.9% less than a year ago.

By contrast, exports to the European Union were up by 3.5% and to other countries by 11.9%, but these were unable to make up the overall shortfall in beer sales.

"After seven months of lockdown, the reopening of the hospitality sector outdoors and indoors has started up only slowly. The stops and starts in the sector are severely impacting sales by breweries and by the bulk beer sector," the brewers' association said in Berlin.

Smaller breweries dependent on the hospitality and events sector were being particularly badly hit, it said.

Consumer spending is thought to be one factor driving Germany's GDP growth