Germany's gross domestic product (GDP) in 2021 grew by 2.9 percent year-on-year, the Federal Statistical Office (Destatis) said on Friday.

Destatis's earlier estimate stood at 2.7 percent. In the fourth quarter of last year, GDP only declined by 0.3 percent instead of 0.7 percent as previously assumed, said the office.

"After economic performance had increased again last summer despite growing delivery bottlenecks and material shortages, the recovery of the German economy came to a halt at the end of the year due to the fourth COVID-19 wave," Destatis noted.

Although consumer spending fell by 1.8 percent in the final quarter of 2021, government spending was up one percent and had a "stabilizing effect," according to Destatis.

While the output of Germany's industry increased slightly, the recovery in many service sectors, in particular entertainment, was halted by the fourth wave of the pandemic.

Due to the pandemic development, the German government already lowered its economic growth forecast for 2022 from 4.6 percent to 3.6 percent in late January.