The German economy failed to return to its pre-pandemic size in 2021 as microchip shortages hit production in the car industry and further Covid-19 restrictions slowed down the recovery of Europe's largest economy.
German gross domestic product grew 2.7% in 2021 after plunging 4.6% in the first coronavirus crisis year 2020, according to preliminary figures from the Federal Statistics Office.
The estimate was in line with a Reuters poll of analysts.
The figures mean that Germany's economic output was still 2% below the level of the pre-crisis year 2019, the office said.
The world's fourth-biggest economy shrank in the final three months of 2021 after growing in the previous two quarters as an increase in coronavirus infections led to renewed restrictions in retail and hospitality, the office said.
An early GDP estimate for the fourth quarter points to a contraction between 0.5% and 1%, a spokesperson added.
The main growth drivers in 2021 were a jump in exports and massive public spending to cushion the impact of the coronavirus, the office said.
Germany increased net new borrowing to a record €215 billion last year following an unprecedented sum of €130 billion in 2020 to finance measures in the fight against Covid.
The public sector deficit of all state levels rose to €153.9 billion or 4.3% of economic output.
The economy ministry said in its monthly report that ongoing supply bottlenecks for important primary products in manufacturing were likely to persist for a while.