This fall is almost twice as large as the worst of the financial crisis of 2008.
Germany suffered in the second quarter of 2020 with a historical distance of 10.1% of its gross domestic product (GDP), as a result of the restraint measures put in place to limit the spread of the coronavirus, has announced this Thursday, the federal statistics Office, Destatis.
This is the “worst decline in the indicator since the early quarterly measures of the GDP in Germany in 1970,” said Destatis in a press release, stating that the fall compared to the second quarter of 2019 was 11.7%. Moreover, the unemployment rate remained stable in the country in July, at 6.4%, after three consecutive months of increases due to the economic crisis caused by the pandemic of sars coronavirus, according to seasonally adjusted data released on Thursday.
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The economy has suffered a shock multiforme : containment decreed in the face of the health crisis that has paralysed the production of many sectors, slowed sharply in the exchanges and restrained consumption. Its industry is strongly export oriented, already suffering before the pandemic because of trade tensions and international concerns related to the Brexit, has been hit hard.
In April, at the height of the restrictions, manufacturing output fell by 17.9%, the orders to the industry of 25.8%. Exports are collapsed to 31.1%. The tourism and aviation have also been durably affected : the national champions TUI and Lufthansa have had to call the State to the rescue, and have announced several thousand job cuts.
Return to growth “at the latest in October,”
These figures, as striking as they are, are a “look in the rear view mirror”, so that “the German economy has already resumed”, says Carsten Brzeski, analyst for ING. With a health status better than that of its neighbours, Germany has risen from may, most of his restrictive measures, allowing for a recovery in economic activity.
“there are clear signs of recovery”, confirmed on Wednesday the German economic institute DIW. The economy is driven by domestic demand – consumption, services and construction — which reports to the head faster than the industry.
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Berlin was adopted in June a package of 130 billion euros, intended precisely to encourage the consumption, thanks to a strong decrease of the VAT, and the grant allowance increased to € 300 per child for parents. In addition to the support measures at the national level, Germany also intends to take advantage of the european recovery plan of 750 billion euros decided by the 27 in Brussels in mid-July and that she has borne.
“I am confident that, with the implementation of this plan, [Germany] will be a sustainable growth in 2021 and 2022”, has said Peter Altmaier. The government expects a return to growth at the latest from October, and a rebound of 5.2% by 2021, as well as a return to production levels before the crisis in 2022.
The risks of a second wave
To 2020, it expects a recession of 6.3%. It would be better than its european partners, while the GDP of France, Italy and Spain could contract by more than 10%, according to the european Commission. The recovery in German will depend, however, largely from a recovery in international trade, warn the economists.
“The continuation of the pandemic in many parts of the world can be a huge risk to Germany, export nation”, warned Monday Fritzi Köhler-Geib, chief economist of the public bank KfW.
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In addition, the crisis of the novel coronavirus boosts us-china tensions, which could, like in the year 2019, be a highly disruptive in world trade.
A second wave of the virus is finally likely to constrain the dynamics, while Germany is experiencing a resurgence of infections on their soil in this period of the summer vacation, visible in some other european countries, especially Spain.
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“Covid-19”, the new coronavirus
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