According to data released on Friday, the German economy did not return to its pre-pandemic size in 2021, as microchip shortages hampered car production and more COVID-19 restrictions hindered the recovery of Europe's biggest economy.

Preliminary statistics from the Federal Statistics Office showed that GDP increased by 2.7% in 2021 after falling by 4.6% in the first coronavirus crisis year of 2020.

The figures indicate that Germany's economic output was still 2% lower than in 2019, the pre-crisis year, the office said.

The world's fourth-largest economy shrank in the final three months of 2021, following two quarters of growth, as a spike in coronavirus infections prompted tougher restrictions in retail and hospitality, according to the office.

German economy ministry says ongoing supply bottlenecks likely to persist  for a while | Forexlive

A spokesperson added that an early estimate for the fourth quarter GDP points to a contraction between 0.5% and 1.0%.

The key growth drivers in 2021, according to the office, were an increase in exports and huge public spending to mitigate the impact of the coronavirus.

Following an extraordinary sum of 130 billion euros in 2020 to fund COVID-fighting efforts, Germany boosted net new borrowing to a record 215 billion euros last year.

The public sector deficit at all levels of state increased to 153.9 billion euros, or 4.3% of economic output.

In its monthly report, the economy ministry predicted that persistent supply bottlenecks for critical primary products in manufacturing would last for some time.