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Bloomberg
Germany’s economy will likely shrink this quarter at more than twice the pace recorded at the height of the financial crisis, according to the country’s leading research institutes.
Output is predicted to slump 9.8% in April-June period, the most since records for quarterly data began in 1970. The economy is set to contract 4.2% over the course of this year, before government measures to counter
the coronavirus impact fuel expansion of 5.8% in 2021.
The size of the full-year contraction this year is smaller than the 5% predicted last week by Economy Minister Peter Altmaier. Yet the institutes cautioned that there are “considerable downside risks†to their projections, including a slower than expected weakening in the spread of the virus, problems with reviving the economy after the shutdown eases or a new wave of infections.
“The recession will have a profound impact on the labour market and public finances,†Timo Wollmershaeuser, head of business-cycle analysis and forecasts at the Ifo institute, said in a statement. The unemployment rate will likely rise to 5.9% this year, he added.