Germany Forecasts 6.3% Contraction This Year on Virus Hit
Germany Forecasts 6.3% Contraction This Year on Virus Hit
(Bloomberg) --
Germany expects the fallout from coronavirus to lead to the worst economic contraction in the post-war era, according to a person with direct knowledge of the matter.
Gross domestic product for Europe’s largest economy is forecast to shrink by 6.3% in 2020, said the person, who asked not to be identified ahead of the release of official projections on Wednesday. A spokesman for the Economy Ministry declined to comment.
The figure, which was reported on Friday by the Handelsblatt newspaper, would be a deeper plunge than during the financial crisis a decade ago, when the economy contracted by 5.7% in 2009.
Germany has been crippled by lockdown measures to contain the pandemic, which have shuttered factories, halted travel and closed schools across the continent. Almost every third company in Germany has requested state wage support.
The country is now grappling with efforts to relax restrictions on the economy, but is urging caution over concerns that a renewed outbreak of the disease could worsen the crisis.
“We have a very pleasing decline in infection numbers, but the easing that’s taken place in the last few days haven’t had any impact yet,” Economy Minister Peter Altmaier said Monday on Deutschlandfunk radio. “Therefore, I recommend that we proceed very, very cautiously so that we don’t take back any easing.”
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