The German economy will fall into a deep recession this year due to the corona crisis, but is well equipped to withstand it and grow strongly again next year. Five leading German economic research institutes reported the forecast.
They expect a contraction of 4.2 percent this year, which would be the strongest recession since the financial crisis. There are some uncertainties associated with this forecast, the institutes warn. For example, if the pandemic lasts longer, the downturn in Europe’s largest economy could fall even deeper.
Thanks to extensive measures by the German government to stimulate the economy and help companies and households to get through the crisis, next year there may be an upturn in Germany’s economy by 5.8 percent, the experts think. The government has ample financial resources to provide support, say the economists.
The German minister of Economic Affairs Peter Altmaier thinks that an economic contraction of more than 5 percent will be seen over the whole of 2020. He expects the economy to grow again next year.