Germany’s economic institute projected a much less severe GDP contraction of -6% this year, revised from June’s estimate of -9.4%. For 2021 and 2022, grow is expected come back with 4.1% and 3.0% rise respectively. But the forecasts are based on assumption that there will not be renewed lockdown as another wave of coronavirus infections.
Marcel Fratzscher, DIW President: “The economic slump this year is likely to be a little less than feared. It would be wrong to think now that the crisis will be over quickly. We have to admit that there can and will be setbacks, for example corporate bankruptcies and an increase in unemployment. It is therefore right that the federal government has extended many aid measures.”
Claus Michelsen, DIW Economic Director: “So far, the German economy has come through the crisis better than feared. The historic slump in gross domestic product in the spring will be followed by an extremely strong third quarter, so we can be more optimistic overall than we were in the summer. Politicians reacted correctly to the crisis with their stabilizing measures – the federal government’s economic stimulus program is also helping to get demand going again. Nevertheless, the bottom line is that economic output this year is likely to decline significantly compared to the previous year.
“And for the further process, at least skepticism is appropriate. Many important German trading partners have been hit even harder, which means that the export industry in this country can look to an uncertain future. And in Germany, too, much of the economic damage will only gradually become apparent. So the crisis will keep us busy for a long time. ”
