Germany hit by one of the worst economic recessions since the 1990s
US, WASHINGTON (ORDO NEWS) — The coronavirus crisis has severely impacted the German economy, which is experiencing its third worst recession since the 1990s. In the second quarter, its GDP could thus fall by 12%, according to the television channel N-TV.
The German economy collapsed in the first quarter due to the coronavirus crisis . The decline has been almost unprecedented in severity since the 1990s and in the second quarter GDP could decrease by 12%, reports the television channel N-TV.
The country is already in a technical recession, ie two consecutive quarters of contraction of the GDP.
“This is the largest drop since the global financial and economic crisis of 2008-2009 and the second largest drop since German unification,” said the Federal Statistical Office (Destatis) in a first estimate.
The restrictions adopted following the epidemic have paralyzed most of economic life.
Recession in key sectors
“In March a clear recession was observed in the main economic sectors following the crisis. Compared with the previous month, industrial production, the number of orders in the processing industry and exports have decreased more than ever since 1990-199, “said Albert Braakmann, head of department at Destatis.
He found that the crisis had been felt by consumers.
HQ Trust chief economist Michael Heise has seen the impact on various consumer goods and services.
“Medicines, medical services, hygiene products and agricultural products have temporarily become more expensive because many workers in these sectors were unable to do their jobs. Thank goodness this is offset by the low prices of energy resources and oil which have a strong impact on the consumer price index,” he said.
Federal aid essential
According to expert estimates, the recession has not yet bottomed out. The Economic Research Institute forecasts bring it to 12% in the second quarter.
In this context, the Association of German Chambers of Industry and Commerce insists on increasing federal aid, saying that additional stimulation is necessary to increase the economic capacity of the maximum number of companies.
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