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German economy to contract 6.5% this year due to coronavirus

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IFO: German economy will shrink by at least 6% this year due to COVID-19 Description video: Slumping economies: With the European powerhouse, Germany, predicting a 6 per cent fall this year, we’ll ask how quickly we’ll get over the financial […]

IFO: German economy will shrink by at least 6% this year due to COVID-19

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Slumping economies: With the European powerhouse, Germany, predicting a 6 per cent fall this year, we’ll ask how quickly we’ll get over the financial effects of the Coronavirus.\n\nSubscribe to our channel: http://bit.ly/2nhQGgN\nLatests news : http://bit.ly/EuronewsTopStories\n\nFollow us on our thematic channels:\nNoComment: https://www.youtube.com/c/nocommenttv?sub_confirmation=1\nEuronews Living: http://bit.ly/2sMsaDB\nKnowledge: https://www.youtube.com/c/euronewsknowledge?sub_confirmation=1:\n\nFollow us on all platforms and on all devices: https://www.euronews.com/follow-us\n\nEuronews is available on YouTube in 12 languages: https://www.youtube.com/user/euronewsnetwork/channels\n\n#Coronavirus #covid19

German economy to contract 6.5% this year due to coronavirus

Germany’s economy will shrink 6.5% this year due to the coronavirus pandemic, the government’s economic advisers council said on Tuesday, adding that the downturn will continue if the number of new infections rises..

German economy to contract 6.5% this year due to coronavirus

Gloomy prospects have emerged after the prime minister of Germany’s most populous state of North Rhine-Westphalia put the Gütersloh region back into quarantine until June 30 following a coronavirus outbreak at a meat processing plant.

«The coronavirus pandemic is expected to cause the biggest downturn in the German economy since the founding of Germany. But we expect recovery to begin in summer», – said the head of the council Lars Feld.

Adjusted for calendar effects, Germany’s economy is expected to contract 6.9% this year. The council said it expects a slow recovery in the second half of the year, with a forecast for gross domestic product (GDP) growth of 4.9% next year..

«This means that GDP is likely to return to its pre-pandemic level at the earliest in 2022.», – the council said in a statement, adding that government stimulus measures are likely to help rebuild.

According to Feld, the government should continue its active fiscal policy next year and avoid debates on consolidating public finances until 2022..

Chancellor’s office Angela Merkel approved a supplemental budget last week to fund its stimulus package, pushing total new borrowing to a record € 218.5 billion ($ 245.35 billion) this year.

Feld said he is confident that another quarantine and a second economic downturn can be avoided, as authorities and citizens have learned to adapt to the new risk of infection by being more careful..

Earlier on Tuesday, a survey of purchasing managers showed that the recession in Germany’s private sector eased further in June, but the disruptions and uncertainty surrounding the coronavirus continued to impact demand..