<p>BERLIN &mdash; Germany’s economy contracted more than expected in the first quarter amid coronavirus lockdown measures, according to statistics released Tuesday, but a leading indicator showed that businesses’ optimism is rising as the pace of vaccinations increases.</p>
<p>The Federal Statistical Office said that the first quarter gross domestic product in Germany, Europe’s largest economy, dropped by 1.8% over the fourth quarter of 2020, according to figures adjusted for price, seasonal and calendar factors. The office’s preliminary estimate had been a drop of 1.7%.</p>
<p>GDP was down 3.4% over the same quarter last year, when the pandemic was just starting to take hold, according to price adjusted figures, and 3.1% when adjusted for both price and calendar factors. </p>
<p>Many facets of the economy were shut down in the first quarter of 2021 as Germany grappled with rising coronavirus infection figures. </p>
<p>The country has recently been gradually moving to open up more areas of public life, however, as the latest wave of virus infections subsides and its vaccination campaign gathers pace.</p>
<p>According to the closely-watched monthly survey from Munich’s Ifo institute, sentiment among German managers has followed with a considerable improvement. </p>
<p>The agency’s index of business climate rose to 99.2 points in May from 96.6 points in April, its highest value since May 2019.</p>
<p>According to its sub indices, companies were more satisfied with their current business situations as well as more optimistic for the coming months, Ifo said. </p>
<p>“The finally accelerating vaccination rollout, as well as first steps in the reopening of the economy, have clearly boosted optimism,” ING economist Carsten Brzeski said.</p>
<p>He cautioned that new variants of the coronavirus could cause a setback, and that supply chain disruptions could harm the manufacturing sector, but that the “general outlook for the German economy is improving.”</p>
<p>“We expect private consumption and the construction sector to be the main drivers of growth in the second quarter,” he said. </p>