COVID-19 Pushes Germany Into Recession

 COVID-19 Pushes Germany Into Recession

German output shrank by 2.2 per cent in the first quarter of 2020, official data showed Friday, May 15, 2020, as the coronavirus pandemic tipped Europe’s top economy into 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 per cent, meaning Germany has now experienced two consecutive quarters of contraction — the technical definition of a recession.

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.

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.

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

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