Ifo economist Timo Wollmershaeuser said in the report that the Germany economy “slumped drastically as a result of the corona pandemic” and GDP could shrink -4.2% in 2020. Unemployment rate will “skyrocket to 5.9%”. Fiscal stabilization measures will lead to a record” deficit of EUR 159B. Though, GDP could rebound next year with 5.8% growth.
Downside risks include:significantly slower weakening of the pandemic; Restarting economic activity works worse than in the base scenario or triggers another wave of infection, further measures to fight infection come into force, which shut down production longer or to a greater extent than assumed here; Faults in the financial system; Sovereign debt crisis; Realignment of global value chains and sales markets