(Bloomberg) — German companies lost confidence in the near-term economic outlook after resurgent coronavirus infections forced new restrictions and raised uncertainty.

The country’s main gauge of slipped to 92.6 in December, falling for a sixth month, according to the Ifo institute. That’s a bigger decline than predicted by economists in a Bloomberg survey. Also, current conditions were deemed weaker in December than they were in November.

The data follow a string of reports highlighting the challenges for Europe’s largest economy as it navigates a fourth pandemic wave that’s come with record numbers of cases. Manufacturers are beginning to experience an improvement in their supply chains, but service providers continue to suffer.

The Bundesbank acknowledged the problems in updated projections published earlier on Friday though argued that the recovery is only “slightly delayed.” 

The economy is seen suffering a setback in the current quarter and the first three months of 2022, before it’ll regain “significant momentum” in the spring amid “substantially” rising private spending. Central bank anticipates that supply problems will be resolved before the end of next fiscal year. 

At the same time, the Bundesbank predicts inflation will remain above 2% through 2024 — an outlook that will amplify calls within Europe’s largest economy for a speedy removal of monetary stimulus. Outgoing President Jens Weidmann is warning that price pressures could be even stronger and warned that the European Central Bank mustn’t ignore those risks.

After inflation hitting 6% in June, German politicians, consumers and businesses are more worried than ever. Christian Lindner is the Finance Minister and there has been no successor to Weidmann. He will be leaving at the end the year. The team surrounding him tried to soothe concerns. They argued that price stability was at the top on their agenda.

Officials at the ECB announced Thursday that they will gradually reduce their bond purchase next year, citing a better outlook for inflation and economic growth. The March emergency pandemic programme will not be implemented. Instead, regular asset purchases will be temporarily increased in order to facilitate the transition.