The Corona year 2020 caused one of the worst recessions of the post-war period in Germany. As reported by the Federal Statistical Office, the gross national product (GDP) slumped by 5.0 percent last year. There was only one major slump in economic output – in 2009, during the global financial crisis, GDP fell by 5.7 percent.
Experts expected such a development. “While branch retail, catering, the event industry and hairdressers in particular suffered from the lockdowns, business in most industrial sectors was better again towards the end of the year,” comments Michael Stappel, Head of Macroeconomics / Industry Research at DZ Bank.
Commerzbank chief economist Jörg Krämer also sees a positive trend. In a statement, he points out that economic output almost stagnated in the fourth quarter of 2020 and that it did not react particularly strongly to the renewed lockdown.
GDP Germany: Commerzbank also expects a decline in the first quarter of 2021
However, Commerzbank assumes that GDP will again be negative in the first quarter of the current year. “In contrast to the situation up until mid-December, the lockdown will also affect the retail trade without everyday goods. In addition, with a view to the persistently high new infections and the slow vaccination, a continuation of the lockdown must be expected at least until the end of March, ”said Krämer. Therefore, from January to March 2021, he expects a minus of two percent compared to the fourth quarter of the previous year.
But, continues Commerzbank, the German economy should recover strongly from spring onwards. The institute continues to expect an increase of 4.5 percent for the entire year 2021. The seasonal effect of summer and the high savings rate among Germans give Jörg Krämer hope. “The return of the savings rate to its old level alone will cause consumer spending to rise significantly. If the households should also spend some of this additional saved money, that will push the economy even further, ”he says.
Economists expect the German economy to make a strong comeback
Many other economists are also predicting a strong comeback for Germany in 2021. The upswing in the manufacturing industry is still intact and, in terms of foreign trade, there is growth impetus from demand from China and the USA, argued Lars Feld, for example, recently the head of the Advisory Council on Economic Development.
Most economists currently expect the German economy to return to the level it was before the Corona crisis at the turn of the year 2021/2022 at the earliest – provided that by then so many people have been vaccinated against the corona virus that economic life returns to normal.
With material from the DPA.