Ifo said Germany’s recession was “rather mild compared with other countries”. Spread of the coronavirus was brought under control with less restrictive measures. Industrial production was also less affected by government’s measures. Still, GDP will not reach its pre-crisis level until Q2 of 2021.
GDP forecasts was revised up to -5.2% in 2020, raised from prior forecast of 6.7%. 5.1% growth in GDP is projected for 2021 and then 1.7% in 2022. Unemployment rise is forecast to drop steadily from 5.9% in 2020 to 5.7% in 2021 and 5.5% in 2022. CPI is projected to climb back from 0.6% in 2020 to 1.4% in 2021, then 1.6% in 2022.
Ifo chief economist Timo Wollmershaeuser noted, however, “the degree of uncertainty in our forecasts is enormous because nobody knows how the coronavirus pandemic will develop, whether there will be a hard Brexit after all, and whether the trade wars will be resolved. ”
