COVID-19 pushes Germany into recession

Agency Reporter

German output shrank by 2.2 percent in the first quarter of 2020, official data showed Friday, as the coronavirus pandemic tipped Europe’s top economy into a recession.

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

The agency also revised its gross domestic product (GDP) figure for the final quarter of 2019 from zero growth to a contraction of 0.1 percent, meaning Germany has now experienced two consecutive quarters of contraction — the technical definition of a recession.

German Economy Minister Peter Altmaier last month warned that the country was facing “the worst recession” in its post-war history as the pandemic batters the global economy.

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

Export-reliant Germany is also hard hit as international trade and travel are curtailed.

“Private consumption, exports and investments in equipment shrank considerably as a result,” the German economy ministry said in a statement.

The second quarter is likely to show an even bigger slump before a recovery gets under way, it added.

State consumption and the construction industry were the only growth drivers in the first three months of the year.

“Two weeks of lockdown as well as supply chain disruptions on the back of lockdown measures elsewhere brought the German economy to its knees,” said ING-Diba economist Carsten Brzeski.

Some experts have predicted that the German economy could contract by around 10 percent between April and June.

(www.newsnow.co.uk)