The German government Wednesday cut its growth forecast for this year, but said that Europe's biggest economy remains robust and will return to its pre-pandemic size in 2022. The Economy Ministry predicted that gross domestic product will grow by 3.6 percent, down from the 4.1 percent Germany's previous government forecast in late October.

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The picture has been clouded since then by a steep new wave of coronavirus infections fueled by the highly contagious omicron variant.

GDP grew 2.7 percent last year, according to preliminary official figures, rebounding from a plunge of 4.6 percent in 2020 when pandemic lockdowns were at their most severe. The government said this year's projected growth will bring it back to its pre-crisis size.

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The consequences of the coronavirus pandemic are still noticeable and many companies still have to struggle with them, Economy Minister Robert Habeck said in a statement. Nevertheless, our economy is still robust.

Germany's national statistics office has estimated that output in Germany fell by between 0.5 percent and 1 percent in last years final quarter. Forecasts are also shaky for the current quarter, raising the possibility of a technical recession.

But hopes are high that the picture will improve as the year progresses. On Tuesday, a closely watched survey showed business confidence unexpectedly picking up in January after a six-month slide. That increase came thanks to a significant improvement in managers' outlook for the next six months, even as their assessment of the current situation worsened.

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(Edited by : Yashi Gupta)