The Daily Times Newspaper

Germany is Counting on A 6.3 Percent Economic Contraction Due to the Crisis

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The German government projects the economy to shrink by 6.3 percent this year as a result of the corona crisis.

 

This is evident from the spring estimate presented by the German Economy Minister Peter Altmaier. For next year, the government expects a growth of 5.2 percent. Only in 2022 does Berlin expect the economy to regain its pre-virus outbreak.

The recession caused by the corona measures has bottomed out in the current quarter, the German Ministry of Economy expects. After that, economic activity should increase again if the lockdown can be eased gradually.

Before the crisis, Germany still expected economic growth of 1.1 percent. However, measures to halt the spread of the virus are causing severe blows to the economy. Germany allocated more than a trillion euros to support the economy.

The support plans irrevocably still have gaps, leaving companies or sectors out of the picture, Altmaier said. They must be found and repaired as soon as possible.

Altmaier himself pointed to organizers of trade fairs and cultural events that may need more support. The minister also expects the catering sector to need help for a more extended period.

Altmaier also said that measures to boost consumption are part of the German government’s plans. The car industry, in particular, has asked for this because consumers generally postpone large purchases in times of crisis.

The German government estimates its economic downturn to be more severe than credit rating agency Moody’s. Earlier this week, it reported that the German economy would shrink by 5.5 percent.

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