Germany saw its economy shrink by 1.7 percent during the months of January through to March due to the renewed lockdown, according to figures from the Federal Statistical Office. This comes after the country was forced to imposed further restrictions as cases of the virus continued to rise.
Due to temporary low tax rates during the second half of 2020, the economy rose slightly.
But these purchases are now missing in the consumption statistics for the first three months of the current year, according to reports.
Overall, it is expected that Europe’s largest economy will eventually find its way back to growth from the second quarter of the year.
This is due to more and more people expected to be vaccinated against the pandemic.
In its recently raised forecast, the federal government predicted a 3.5 percent growth for the full year of 2021.
Last year, Germany’s economic output slumped by 4.9 percent.
The state is trying to cushion the economic crisis with billions in aid.
This week, German and French finance ministers urged the European Commission to approve their economic recovery plans.
On Thursday, Germany’s upper house of parliament approved a law to give Ms Merkel’s Government more powers to fight a Covid third wave.
The amendment to the Infection Protection Act enables the national Government to impose curfews between 10pm and 5am, as well as limiting private gatherings, sport and shop openings.
Schools will close and return to online lessons if the virus spread exceeds 165 cases per 100,000 residents.
The law still needs the signature of President Frank-Walter Steinmeier before it can come into force.
Ms Merkel drew up the law after some of Germany’s 16 federal states refused to impose tough measures despite a surge in cases.
Several parties opposed the measures inside the Bundestag after the law was announced.
Manuela Schwesig, leader of the northern state of Mecklenburg-Vorpommern, said the amendment did not go far enough.
Other minister-presidents in Germany shared their concern over the emergency brake.
The emergency brake is expected to last until June 30.
Germany has seen a staggering rise of cases, with the total number of infections now surpassing three million.
More than 80,000 people have now died from the virus.
Doctors have warned that unless action is taken, intensive-care units may struggle to cope.