Connect with us

News

Germany Currently On Recession Due To COVID-19 Pandemic

Published

on

Official data showed Friday, as the coronavirus pandemic tipped Europe’s top economy into recession, German production shrank by 2.2 per cent in the first quarter of 2020.

The quarter-on – quarter contraction is “the worst since the financial crisis” in 2009, said Destatis, a federal statistics agency.

The agency also updated its gross domestic product ( GDP) statistic from zero growth to a contraction of 0.1 per cent for the final quarter of 2019, indicating that Germany has already undergone two consecutive quarters of contraction — the technical concept of a recession.

Last month German Economy Minister Peter Altmaier cautioned that the country faced “the worst recession” in its post- history as the pandemic is battering the global economy.

Like other European countries , Germany closed factories, shops and restaurants forced several workers to stay at home to contain the mid-March outbreak.

As international trade and travel are curtailed, export-reliant Germany is hard hit too.

“As a result, private consumption, exports, and equipment investments shrank considerably,” the German Ministry of Economy said in a statement.

It is possible that the second quarter will display an even bigger recession before a recovery begins, he added.

In the first three months of the year consumption and the construction industry were the only drivers of production.

“Two weeks of lockout and supply chain disturbances on the basis of shutdown measures elsewhere brought the German economy to its knees,” said Carsten Brzeski, economist at ING-Diba.

Some experts have predicted that between April and June the German economy could contract by about 10 per cent.

Advertisement

Join us on Facebook

Trending