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Corona virus could delay economic recovery

2020-02-22T12:41:46.198Z


The economy in Germany has been split in two for almost a year: services are booming, industry is weakening. Above all, the suffering of exporters could be prolonged. This is due to a current development.


The economy in Germany has been split in two for almost a year: services are booming, industry is weakening. Above all, the suffering of exporters could be prolonged. This is due to a current development.

Nuremberg (dpa) - The outbreak of the corona virus in China could delay a recovery in the German economy and new impetus for the labor market. Economists at leading German financial institutions assume this, according to a survey by the German Press Agency.

"As expected, the spring revival is weak," said Marc Schattenberg of Deutsche Bank. His colleague Katharina Utermöhl from the Allianz Group even believes that a slight contraction in economic performance is possible in the first quarter. For the year as a whole, she only sees growth of 0.5 percent.

However, the number of unemployed will decrease in February. Schattenberg and Utermöhl expect a seasonally adjusted decline in the number of 5,000 to 2.272 million people nationwide. However, the increase in employment only takes place in the service sector, said Utermöhl.

The industry is still sick and could suffer even more from supply shortages as a result of the corona virus from China. "This is a blow to the recovery of the economy," said Schattenberg. An end to the economic trough that was actually expected in the first quarter of 2020 could therefore be delayed until the second or third quarter.

Overall, economists see the economic situation in Germany more difficult than a few months ago. "Almost all leading indicators are pointing downwards," said Jens-Oliver Niklasch from Landesbank Baden-Württemberg (LBBW). However, there are no acute slumps to worry about. He only sees growth of 0.4 percent for the full year.

"The economic downturn is increasingly arriving on the labor market," emphasized KfW banking economist Fritzi Köhler-Geib. Healthcare, real estate, and information and communications continued to show the greatest employment gains. Employees of temporary employment agencies are particularly affected by the job cuts.

At the end of 2019, there were around 80,000 fewer employees subject to social security contributions than in the previous year - this corresponds to a decline of ten percent. Private consumption remains stable, said Köhler-Geib. "This is thanks to the development in real wages." These rose by two percent in 2019.

Source: merkur

All news articles on 2020-02-22

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