The Limited Times

Now you can see non-English news...

Corona crisis hits German economy hard

2020-05-15T02:31:56.279Z


Closed borders and shops, production standstill. The corona pandemic has more or less paralyzed the global economy. This also affects Europe's largest economy.


Closed borders and shops, production standstill. The corona pandemic has more or less paralyzed the global economy. This also affects Europe's largest economy.

Frankfurt / Berlin (dpa) - According to economists, the corona crisis slowed down the German economy in the first quarter. Initial restrictions, closed borders and business have brought economic life to a standstill in parts since mid-March.

The Federal Statistical Office today uses preliminary data to show how much the gross domestic product (GDP) shrank in the first quarter compared to the previous quarter. Economists expect a decline of between 1.8 and 2.5 percent.

According to initial data from the European statistical office Eurostat, economic output in the euro area shrank by 3.8 percent in the first quarter. It was the sharpest decline in the common currency area since the 1995 surveys began.

According to economists, the bottom has not yet been reached. The decline in the second quarter, when the corona measures had a stronger impact, is likely to be more severe. "The low point of the crisis is now likely to be behind us in April, but the increase will only take place gradually and there can be no question of normalcy for a long time to come," said Stefan Kooths, economic director at the Institute for the World Economy. Economists at Deutsche Bank expect gross domestic product to plunge 14 percent in the second quarter compared to the previous quarter. Economists at the KfW development bank predicted Europe's largest economy "a long way out of the Corona Valley".

For the year as a whole, the German government is anticipating the worst recession in post-war history. According to this, the gross domestic product is expected to shrink by 6.3 percent in 2020, even if it should pick up again in the second half of the year. In the global economic and financial crisis of 2009, gross domestic product fell by 5.7 percent. The global corona crisis with broken supply chains is burdening German exports, but also private consumption.

The fear of job loss and short-time work depresses the mood of consumers. According to GfK, a market researcher from Nuremberg, the consumer climate has recently dropped to a historic low. The corona pandemic could affect people's buying mood for a long time to come: According to a GfK survey, one in three believes that their financial situation will deteriorate in the next twelve months.

In the past, the buying mood of consumers in particular had kept Europe's largest economy going. Foreign trade had already slowed in 2019, burdened by international trade conflicts and the slowdown in the global economy.

Source: merkur

All news articles on 2020-05-15

You may like

News/Politics 2024-02-23T08:21:57.445Z

Trends 24h

News/Politics 2024-03-28T06:04:53.137Z

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.