German Economy will shrink by 6% in 2020
Saturday, 09 12 2020, Category: Economy, Country: Germany
According to DIW economists, the Corona recession in Germany is much milder than feared.
The gross domestic product is likely to fall by 6.0 percent this year, the German Institute for Economic Research (DIW) predicted on Thursday in Berlin. In June it had assumed a slump of 9.4 percent. For comparison: The federal government expects minus 5.8 percent, which would still be the worst recession of the post-war period. “The German economy is doing well under the circumstances,” said DIW economic chief Claus Michelsen. The government’s aid package, worth billions, is helping Europe’s largest economy “to get through the crisis better than feared”.
The DIW now expects growth of 4.1 (previously: 3.0) percent for 2021 and 3.0 percent for 2022. However, the pre-crisis level is unlikely to be reached for around a year and a half – provided there is no new wave of infections and restrictions. “It would be wrong to think now that the crisis would be over quickly,” said DIW President Marcel Fratzscher. “We have to admit that there can and will be setbacks.” These included an increase in company bankruptcies and higher unemployment. This year alone there should be half a million more unemployed.