GERMAN ECONOMY SLUMPS DRAMATICALLY

Posted 30 July, 2020

Economic output in Germany plummeted significantly in the second quarter as a result of the corona crisis.

Adjusted for calendar and seasonal effects, gross domestic product (GDP) shrank by 10.1 percent compared to the previous quarter, as the Federal Statistical Office (Destatis) reported in an initial estimate. This is the sharpest decline since quarterly GDP calculations began in 1970.

Economists surveyed by Dow Jones Newswires had estimated only a 9.0 percent drop. The decline was even more pronounced than during the financial market and economic crisis, with a decline of 4.7 percent in the first quarter of 2009. In the first quarter of this year, the GDP was already revised by 2.0 percent (provisionally: 2.2 percent) sunk.

Calendar-adjusted, GDP was 11.7 percent lower in the second quarter. The economists' forecast had been a loss of 11.1 percent.

As the statisticians said, both exports and imports of goods and services collapsed massively in the second quarter, as did private consumer spending and investments in equipment. The state, however, increased its consumer spending during the crisis.

Destatis published GDP for the first time just 30 days after the end of the quarter, around two weeks earlier than before. The Federal Office will continue to announce detailed results after about 55 days. The detailed results for the second quarter will be published on August 25, 2020.

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