Germany in recession with economy in worst plunge since global financial crisis

Figures for the final three months of 2019 were revised to show a contraction of 0.1 percent, which means German GDP growth has been negative for two consecutive quarters, the technical definition of a recession.

The numbers are expected to get worse; Germany’s Statistical Office has forecast a ten percent plunge in GDP for the second quarter, depending on the success of lifting lockdown measures. More than 370,000 people lost their jobs in April alone due to coronavirus-caused shutdowns.

Recent data showed a 15.6 percent month-on-month decrease in factory orders in March, and a 9.2 percent drop in industrial production.

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The German economy’s decline, however, is not as bad as in some neighboring countries. France and Italy have posted first-quarter contractions of 5.8 percent and 4.7 percent respectively.

The German government has already announced some 1.2 trillion euros ($1.3 trillion) to support the nation’s businesses. Finance Minister Olaf Scholz has promised a stimulus program in early June that will focus on investing in a “modern and climate friendly future.”

The country started loosening lockdown restrictions on April 20. Shops have now reopened; restaurants are gradually opening up and auto production has also restarted.

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Article source: https://www.rt.com/business/488749-germany-sharp-recession-financial-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=RSS