The German Economic Institute has cautioned that supply chain disruptions could hold back Germany’s economic recovery in the wake of the coronavirus crisis, something that has already affected around two-thirds of the economy. According to a recent survey by the institute, around 40% of industry groups have experienced severe supply disruptions in the short-term while an addition one-third reported modest disruptions.

The most affected raw materials were microchips – amid the global chip shortage, and wood, which have affected numerous key industries, ranging from automotive and plastics to construction and textile industries across the Eurozone’s most powerful economy. The electronics industry worldwide is likely to suffer severely, especially with ratings agency Fitch estimating the global chip shortages to hold back automakers’ production by as much as 5%.

The supply chain challenges could become even more pronounced especially as demand rebounds sharply, supported by the rapid rollout of the COVID-19 vaccines across Germany. Earlier this week, the German health minister Jens Spahn confirmed that the nation will start offering free COVID-19 vaccines to all adults from June 7, which could make the distribution even more widespread, improving consumer confidence and speeding up its economic recovery.