Germany’s prolonged shutdown to curb the unfold of the coronavirus will weigh on Europe’s largest economic system however not choke it off, with financial institute Ifo forecasting quarterly progress of three% within the second quarter.
Chancellor Angela Merkel and the nation’s 16 states agreed on Tuesday to increase a shutdown till mid-February as Germany, as soon as seen as a task mannequin for combating the pandemic, struggles with a second wave of infections.
Ifo stated gross home product will doubtless stagnate within the first quarter earlier than rising by 3% quarter-on-quarter in spring.
“Each week with an prolonged lockdown straight results in losses in gross sales, manufacturing and added worth,” Ifo economist Timo Wollmershaeuser stated.
Commerzbank economist Joerg Kraemer stated the lockdown’s affect on retailers and companies will doubtless result in a GDP contraction of two% within the present quarter, including the economic system would usually develop by 2% with out restrictions on exercise.
Final yr, Germany’s economic system shrank by 5%, lower than anticipated and a smaller contraction than in the course of the international monetary disaster, as unprecedented authorities rescue and stimulus measures helped cushion the shock of the pandemic.
The statistics workplace on Jan. 29 will publish GDP figures for the fourth quarter, when some lockdown measures had already been applied.
On Monday, earlier than the lockdown extension was agreed, the Bundesbank stated the economic system was managing to remain afloat however may undergo a “sizeable setback” if coronavirus curbs had been prolonged once more.
Supply: Reuters (Reporting by Klaus Lauer and Thomas Seythal; Enhancing by Kirsten Donovan)