German economic output fell sharply in the previous year due to the Corona crisis.
But the decline is lower than after the financial crisis.
In 2021 things should go up significantly.
The
corona
pandemic hit the German economy with full force.
The
tax revenues
have dropped considerably.
But leading economists expect a
comeback in
2021, thanks in part to demand from China and the USA
.
Update from January 14th, 1:17 p.m .:
Economy Minister
Peter Altmaier
(CDU) expects
an
economic upswing
for
2021
despite the economic
crash
and the ongoing
lockdown.
Altmaier affirmed on Thursday in Berlin that “growth will be clear and noticeable”.
However, Altmaier
did not give any specific figures.
In autumn, the minister had expected the gross domestic product (GDP) in Germany to rise by 4.4 percent for 2021.
First report from January 14th, 10:22 am
: Wiesbaden - The
Corona
crisis plunged the German economy into one of the worst recessions of the post-war period and tore deep holes in the state budget.
The
gross domestic product
(
GDP
) collapsed last year by 5.0 percent compared to the previous year, as the Federal Statistical Office announced on Thursday based on an initial estimate.
Economic output only contracted more strongly during the global financial crisis in 2009, when GDP fell by 5.7 percent.
In the final quarter of 2020, which was marked by the second lockdown, GDP is likely to have stagnated compared to the previous quarter, according to statisticians.
For the first time since 2011, Germany posted a
budget deficit for
the year as a whole
.
According to the Wiesbaden authority, the federal government, states, municipalities and social security funds spent 158.2 billion euros more than they received last year.
In relation to total economic output, the deficit was 4.8 percent.
That was the second-highest deficit since German reunification, only exceeded by the record deficit of 1995, when the trusteeship's debts were taken over into the state budget.
Tax revenue collapses by eight percent
The state's income sank in the Corona crisis.
The
tax revenue
declined sharply by 8.0 percent, partly because the VAT was reduced from 1 July to for half a year, to boost to private consumption.
At the same time, government spending increased, among other things due to aid packages worth billions.
In March and April 2020, parts of the German economy had effectively come to a standstill as a result of the pandemic.
The situation was similar in many other large economies, borders were temporarily closed, supply chains torn.
Although a recovery began in the summer, in the autumn there were new restrictions on economic and social life in view of the increasing number of infections.
The borders, however, remained open.
In the year as a whole,
exports
(minus 9.9 percent) and
imports
of goods and services (minus 8.6 percent) fell after price adjustments.
Private consumer spending shrank by 6.0 percent and thus more sharply than ever before.
Corporate investment in equipment such as machinery also declined.
Only government consumer spending and construction increased compared to the previous year and thus prevented an even stronger economic slump.
Economy: Economists expect a strong comeback in the current year
A number of economists are predicting a strong comeback for Europe's largest economy this year - despite the lockdown that was initially extended to the end of January.
The upswing in the manufacturing industry is still intact and, in terms of foreign trade, there is growth impetus from demand from China and the USA, argued the head of the Advisory Council on the Assessment of Macroeconomic Development,
Lars Feld
.
Most economists currently expect the German economy to return to the level it was before the Corona crisis at the turn of the year 2021/2022 at the earliest - provided that by then so many people have been vaccinated against the corona virus that economic life returns to normal.
Germany does not face
problems with
Brussels
because of the deficit.
Because of the Corona crisis, the EU states suspended the rules of the Stability and Growth Pact for the first time, according to which the budget deficit must not exceed three percent and the total debt must not exceed 60 percent of the gross domestic product.
(dpa)
