Forecast scenario: German economy will not return to pre-crisis level until 2023

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Pedestrian zone in Essen: increasing uncertainty

Photo: Rupert Oberhäuser / imago images / Rupert Oberhäuser

According to Prognos researchers, the worsening of the corona crisis could set the German economy back by years.

"The current pandemic gives great cause for concern that the acute, but also permanent economic consequences will be much more serious than expected in the past few months," said a crisis scenario published by the Berlin economic research and consulting company on Friday.

"All in all, we are missing three to four years of growth," said Prognos' chief economist Michael Böhmer.

The quicker it is possible to curb the increasing number of infections, the lower the economic damage will be.

In their crisis scenario, the Prognos economists assumed that the economic recovery expected so far would be delayed by two quarters.

The researchers assume that the economy will collapse again, albeit more mildly than in the spring: Consumers and companies are likely to be reluctant to spend and invest due to increasing uncertainty, while increasing numbers of infections in other countries are slowing the export economy.

In this scenario, the gross domestic product would collapse by 8.1 percent for 2020.

The recovery in 2021 with 2.5 percent economic growth is likely to be weaker than previously hoped.

Compared to the pre-crisis year 2019, the GDP of Europe's largest economy would be almost 190 billion euros lower in 2021.

According to the calculation, this would be a loss of 2200 euros per inhabitant.

"At the end of 2021, economic output is still 3.5 percent below the level of the end of 2019," write the economists.

"We will only reach the pre-crisis level in the course of 2023."

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mik / dpa